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	<title>Market Data Trader &#187; Butterfly</title>
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		<title>Time Decay: Another Way to Trade Silver</title>
		<link>http://marketdatatrader.com/2009/10/30/time-decay-another-way-to-trade-silver/</link>
		<comments>http://marketdatatrader.com/2009/10/30/time-decay-another-way-to-trade-silver/#comments</comments>
		<pubDate>Fri, 30 Oct 2009 07:13:57 +0000</pubDate>
		<dc:creator>Alpha</dc:creator>
				<category><![CDATA[Butterfly]]></category>
		<category><![CDATA[Options]]></category>
		<category><![CDATA[Silver]]></category>
		<category><![CDATA[Time Decay]]></category>

		<guid isPermaLink="false">http://marketdatatrader.com/2009/10/30/time-decay-another-way-to-trade-silver/</guid>
		<description><![CDATA[Just to mix things up a little bit.&#160; I’m going to cover a silver trade that I am watching.&#160; 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 [...]]]></description>
			<content:encoded><![CDATA[<p>Just to mix things up a little bit.&#160; I’m going to cover a silver trade that I am watching.&#160; 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.</p>
<p>When I put the trade on Monday morning, the market was trading around 17.46 on the underlying.&#160; I was interested in a speculative trade, looking to catch between 5-15 days worth of time decay below present value.&#160; The trade I put together looked like:</p>
<p><a href="http://marketdatatrader.com/wp-content/plugins/wordpress-feed-statistics/feed-statistics.php?url=aHR0cDovL21hcmtldGRhdGF0cmFkZXIuY29tL3dwLWNvbnRlbnQvdXBsb2Fkcy8yMDA5LzEwL2ltYWdlMTMucG5n"><img style="border-right-width: 0px; display: inline; border-top-width: 0px; border-bottom-width: 0px; border-left-width: 0px" title="image" border="0" alt="image" src="http://marketdatatrader.com/wp-content/uploads/2009/10/image_thumb13.png" width="515" height="57" /></a> </p>
<p>Buying 10 Nov 17 and 15 Puts while Selling 20 Nov 16 Calls.</p>
<p>Here is a look at the analysis on the trade, roughly as it looked when I entered (white line).</p>
<p><a href="http://marketdatatrader.com/wp-content/plugins/wordpress-feed-statistics/feed-statistics.php?url=aHR0cDovL21hcmtldGRhdGF0cmFkZXIuY29tL3dwLWNvbnRlbnQvdXBsb2Fkcy8yMDA5LzEwL2ltYWdlMTQucG5n"><img style="border-right-width: 0px; display: inline; border-top-width: 0px; border-bottom-width: 0px; border-left-width: 0px" title="image" border="0" alt="image" src="http://marketdatatrader.com/wp-content/uploads/2009/10/image_thumb14.png" width="510" height="321" /></a> </p>
<p>The light blue line (shaped much like a triangle), represents the value of the position at expiration.&#160; If price hangs around these levels, I’ll be exiting around the November 14th to 19th timeframe.&#160; That’s roughly 17 days from now.&#160; Odds are that won’t be the case and I’ll just have to manage it as the market runs around.&#160; Regardless, just another way to trade silver.&#160; I hope it helps.</p>
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