Just to mix things up a little bit.  I’m going to cover a silver trade that I am watching.  I was feeling that the metals market was due to roll over in the near future last week and put on a directional butterfly trade with the ETF SLV.

When I put the trade on Monday morning, the market was trading around 17.46 on the underlying.  I was interested in a speculative trade, looking to catch between 5-15 days worth of time decay below present value.  The trade I put together looked like:

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Buying 10 Nov 17 and 15 Puts while Selling 20 Nov 16 Calls.

Here is a look at the analysis on the trade, roughly as it looked when I entered (white line).

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The light blue line (shaped much like a triangle), represents the value of the position at expiration.  If price hangs around these levels, I’ll be exiting around the November 14th to 19th timeframe.  That’s roughly 17 days from now.  Odds are that won’t be the case and I’ll just have to manage it as the market runs around.  Regardless, just another way to trade silver.  I hope it helps.

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