iShares Silver Trust (SLV) PriceWatch Alert With Support Around $13.09

Posted: Monday, July 06, 2009 8:07 AM EDT
By: Market Intelligence Center Staff

iShares Silver Trust (PCX: SLV) closed yesterday at $13.16. So far SLV has hit a 52-week low of $8.45 and 52-week high of $19.17. SLV has been showing support around 13.09 and resistance in the 13.27 range. Technical indicators are Bearish. SLV appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at a Jan '10 12 covered call (SLV AL) for a net debit in the $11.11 area. That is also the break even stock price for this trade. This covered call has a 194 day duration, provides 15.58% downside protection and an 8.01% assigned return rate for a 15.07% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the SLV Jan '11 7 Call (XUX AG) and selling the Jan '10 12 call (SLV AL) for a $4.50 debit. The trade has a 194 day life and would provide 12.61% downside protection and an 11.11% assigned return rate for a 21.00% annualized return rate (for comparison purposes only). [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]