iShares Silver Trust (SLV) 11/17/09 PriceWatch Alert Support At Around $17.29

Posted: Tuesday, November 17, 2009 8:07 AM EDT
By: Market Intelligence Center Staff

iShares Silver Trust (PCX: SLV) closed yesterday at $18.01. So far SLV has hit a 52-week low of $8.71 and 52-week high of $18.13. SLV has been showing support around 17.29 and resistance in the 18.49 range. Technical indicators are Bullish. SLV appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at an Apr '10 17 covered call (SLV DQ) for a net debit in the $15.79 area. That is also the break even stock price for this trade. This covered call has a 151 day duration, provides 12.33% downside protection and a 7.66% assigned return rate for an 18.52% 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 17 call (SLV DQ) for a $7.08 debit. The trade has a 151 day life and would provide 10.72% downside protection and a 12.99% assigned return rate for a 31.00% annualized return rate (for comparison purposes only). [ATU-Seven Summits Research]