iShares Silver Trust (SLV) 11/3/09 PriceWatch Alert Support Down To $15.83

Posted: Tuesday, November 03, 2009 8:38 AM EDT
By: Market Intelligence Center Staff

iShares Silver Trust (PCX: SLV) closed yesterday at $16.16. So far SLV has hit a 52-week low of $8.69 and 52-week high of $17.64. SLV has been showing support around 15.83 and resistance in the 16.61 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 an Apr '10 15 covered call (SLV DO) for a net debit in the $13.92 area. That is also the break even stock price for this trade. This covered call has a 165 day duration, provides 13.86% downside protection and a 7.76% assigned return rate for a 17.16% 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 9 Call (XUX AI) and selling the Apr '10 15 call (SLV DO) for a $5.26 debit. The trade has a 165 day life and would provide 11.76% downside protection and a 14.07% assigned return rate for a 31.00% annualized return rate (for comparison purposes only). [ATU-Seven Summits Research]