SOLD -5 SLW 100 DEC08 7.5 PUT @4.00 LMT

mini Silver

SLW

Wrote some puts on Dec08 of SLW at 7.5 strike price. Fee $7.5.

Upside: Volume on the rally from the low has been consistently high. Price of silver looks as though it has seen the low for now. Note the volume graph on 15-min YI price, the retest of last Friday’s high occurred at lower volume, marked by yellow line.

Resistance: $4 first, then primary at $5. Next up is $9 – $10.

Downside: Week prior to election, rally not supported by volume on overall market. Earnings report on Monday. Commodities under pressure.

Support: $3.

Bottom Line: Can’t say for sure if we’re at the bottom yet. The sentiment is definitely turning. By now til late December, SLW and the overall market should make a sizable rally. I will unload this then.

Stop: If on expirary I’m being put to, then I might just pony up the cash and buy the shares. Effective share price will be $3.5.

Related posts:

1. SOLD -4 DELL 100 DEC 08 13 PUT @1.29
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3. SOLD -1 WFC 100 NOV 08 31 PUT @3.60
4. SOLD -2 ABB 100 FEB 09 12.5 PUT @1.20
5. SOLD -3 SLW 100 DEC 08 5 PUT @1.55