Thursday, February 24, 2011

SLV - Options, weird? You tell me...

I am not an options pro...but lately there has been some interesting bets being placed, most notably in the 2013 contract. See below. If anyone trades options and sees a pattern, especially the fuck load of calls volume in the 2013, feel free to post why this is occurring.


  1. Not an option pro either, but it looks like a straddle trade? Betting on big move one way or the other.

  2. I think is a good place to get a chart analysis. I won't call it a "technical analysis" anymore because in this END GAME scenario there is no such thing as fundamentals or technicals anymore. There is just constant updates and monitoring this and trying to find information to make reasonable decisions.

    Right now the USDollar INDEX is dropping nicely and I cannot wait for fiat to fail. Are you planning a PART 5 video when more information becomes available? I would like to know whatever there is to know about the RCM. Seems like they might make the nicest coins on the earth. Perth mint makes good gold bars I think but other than that their prices are too high for imports.

    I think the sources for buying bullion are going to start to get less now. I made my usual rounds and called a few places today and I think some unreasonable premium hikes are dead ahead.

    Perhaps people are seeing this now for what it really is?

  3. Take a look at the Open interest in the GLD options chart for the Jan 12 put at 60 strike price. That one is pretty significant. At that price, I am loading up on the puts for this one. As sure as gravity and they are cheap right now.

  4. It looks like a strangle to me:

  5. the Jan 12 60 puts are just a cheap bet.

  6. Hey SGS, I'm a newbie to the mining stocks and have enough physical. What are your latest favorite mining stocks? Anyone else have some picks?

  7. Here's a little FEAR VIDEO. I know this guy what?...ok so what then but here's something you might enjoy:

  8. My post said W said instead of "Watchman"....

  9. Thank you for the informative (and funny) animated videos. After following zero hedge for a while, I was wondering "why" JPM is manipulating with the naked shorts on silver.
    So now, after acquiring some physical PM's I learn about the american eagles as "legal tender." What should we do in the event of gov attempts at confiscation??
    That said, should I buy Canadian, Australian from now on?
    Thank you for the work that you do.

  10. SGS - I read you somewhat regularly. I am a small business man, with a stack of silver eagles and maple leafs. I believe with your sentiment. I must tell you though, as a family man who is regularly trying to instill values and morals in my children, I cringe every time you use the "f" word. I tell my children that unintelligent people use this type of language to try and impress people they are actually scared of. I encourage my children to be better people than the type who must dirty their language to get attention. Now I can tell you are intelligent guy - so what am I missing? Should I change the story I tell my kids? Thanks in advance for your response.

    Oh - and Go Silver! Blythe, you are toast! And I look forward to the day JPM and J Diamond appear before the people with hat in hand!

  11. regarding the options I know precisely what it is...I just dont get the logic of that size and using the highest premium 2013. I doubt the Morgue can hang onto this SLV ponzi till then...

  12. SLV - Options, weird? You tell me...
    About half the volume was from people betting that silver will retake $35 soon, and then they can ride out further gains on the option until 2012 without having to roll the option.
    About half the volume today is from people who think the SLV has no silver and will be worthless in 2012.
    Both make sense to me!

  13. Micheal-we all have different upbringings, I can assure you I am educated, I can also assure you I hang around the boys to much, and my f bombs are off the charts. I know. Sometimes I feel as though this gets my point across. I also feel that no other blog is as raw as this...I think it attracts people to it.

    Silver Swan-I will be releasing more juniors I'm in shortly...make sure you take a very close look at TK.V tinka resources as its currently trading as if silver price is $1, nuff said.

    Anon-who cares if they outlaw PM's. they can come try and find mine. Unfortunately, they may find themselves starring at Glock in the process ;)

  14. There is so much "hedging" of derivatives - it can be hard to tell. Zerohedge reported today the backwardation in silver went out to something like 2015. Maybe someone figured out how to pull some sort of arbitrage using the options market to take advantage of this? There has been unusual activity in current month (supposedly expired and standing for exercise) options.

  15. some of us like the verb/adjective/adverb versatility of the "F" word.... nuff said

  16. They sold a vertical spreads 25/26, took the credit and bought the 35 calls? Expecting the price to go up. They will buy back the spreads as its value decays with upward movement. Just my guess...

  17. Anon - yes the lurid appeal of the "F" word is almost as compelling as the ability to interact anonymously on the internet.

  18. Dr. J- I get it, BUT WHY 2013? Someone with deep pockets like that surely knows SLV is a joke...maybe not, there are a lot of fucktards still lingering around out there.

  19. This is going volatile again. It's going to chop like mad. I think the Sprott funds PHYS and PSLV need some more volume. Time to get in there more too. This is going to get fun! Watch gold if it moves above roughly 1425.00 and silver is going to take off!

  20. SGS Without over analysis at simplest form. If one is bullish it could be outright sale of the 25 put to offset premium of a 35 call purchase. Your question about SLV? You said that you are long 35 calls albeit 2012. Not sure why you're utilizing them? I kind of understand cause I'm still buying paper contracts on the COMEX. Its the whole question of when./

  21. The "govern-ment" is well aware of what the true FREE market will bring. Check out the fascist "Science 'czar'" Holdren on this topic of de-developing the USSA.


    According to Zero Hedge, the increase of OIL MARGINS on the ICE and 1 hour later on the NYMEX would have a half life of 2-3 days. Well, it looks like it didn't need to take 2-3 days for oil to come back.

    OIL +$.55 @ $97.83

    If we look at silver after today's OPTION EXPIRY and the big takedown of $1.50, we find that it didn't take long either for it to recover>

    SILVER +$.64 @ $32.75

    Paper manipulation will only keep a lid on the disaster coming down the pike a lil longer. I don't think many realize what happens to the global economy when GOLD and SILVER take their place as money again.

    Globalization stops, and the USA becomes a banana republic overnight. It is a shame us GOLD and SILVER bugs won't be able to enjoy our wonderful investments as many did who many boatloads in the 1970-80 bull market. If you were smart enough to sell your GOLD and SILVER somewhere near the top and buy US TREASURIES, you would have done nicely...and would have had 3 decades to spend your money on WINE, WOMAN and WUNDER-GADGETS.

    Today, when SILVER and GOLD become money, the whole FIAT SYSTEM collapses along with the JUST IN TIME INVENTORY SUBURBAN ECONOMY.

    I guess at least we can say we made the RIGHT TRADE...and leave it at that.

  23. 32.80 Strong snapback.

    May see a huge day on Friday...I got a feeling.

  24. Outlawing gold/silver coins would be extremely stupid. It's trivial to melt the suckers down, and cast it into jewelry. I'm told in India they prefer Maple Leafs for this.

    People have been trading this form of PMs forever. It's just not going to go away.

    However, there are different forms of confiscation. Making the price unaffordable to only but the rich is the most likely form, IMHO.

  25. I'm not sure what to make of this, can you enlighten me?

    They want the option to buy at $35 in 2013, yet at the same time they want the option to sell at $25 at the same time?

    Assuming SLV and the COMEX even exist in 2013, what the hell is the point of this trade?

    If it drops in price, they get screwed, if it goes up in price, they get screwed. Looks like a giant waste of money on premiums.

  26. Couldn't agree more SRSocco... Its very difficult to be an opptomist. The end game. We play our cards as best we can and then what? Silver goes to $500 or more but will it mean? Any answers out there??

  27. Uncharted. You sell the 25 put collect premium and then purchase 35 call. Its a synthetic long of sorts.


    Can't believe Sinclair has finally put PEAK OIL on his website. Peak Oil is bad enough, but the falling EROI (Energy returned on invested) adds insult to injury.

    He also put MIKE RUPPERT's teaser to the DVD documentary "COLLAPSE'. If you have not seen this video....I highyly recommend it. It will open ones eyes to what is coming in the next several years.

  29. abnormal bias: You measure your holdings in ounces then not dollars. Or trade some ounces for acres then?

    Is this China Hour now on the chart? I guess so.

  30. Watchman... sorry for the using the "D" word. You're correct. That is exactly what I tell my friends. I've been trained my whole life about dollars. Ounces... yes ounces. Now I know what is like to be a drug dealer :))

  31. It (silver) actually is a drug too and a good one I hear: one guy OD'd on it and became a Smurf:

    All you need is some tools to make your own. Here's some silver chicks making some: They seem to be from Canada too...hmmmm...something about those Canadian's eh?

  32. I think it is a collar. But from today's volume alone, you cannot see whether the position was opened or closed.

    If you have 1 million shares of SLV (10000 contracts), and you open the collar today, you write 10000 calls at 35 and buy 10000 puts at 25 collecting a premium of about 4.3% of the value of your position.

    As a consequence, you give up any gains beyond 35, but in turn you are protected against losses below 25. Very conservative strategy.

    But I would just not open this position today. Why? Because the strike of the call is too close to the money. I would rather have the call further out of the money and the put closer and do with a smaller premium. So the collar was probably not opened today, but rather closed.

    Have a look at all opens with huge volume today:
    35 call: 10000 contracts
    44 call: 17000
    20 put: 17000
    25 put: 10000
    All other contracts have volume less that 5000 today.

    I think the solution is that someone has in fact 1.7 million shares or more and had a 35/25 collar covering 1.0 million of these. This collar may have originated in early January when SLV dropped back below 30. At 28 or 29 such a collar made sense.

    They closed this position today and opened a new collar at 44/20 covering all 1.7 million shares. If you look at the premiums and do the math, you see that they paid close to zero net premium today. They just widened the collar and extended it to cover more shares.


  33. Ditto the recommendation on the Movie "Collapse". It's a definite must see. One can't argue with Rupperts' numbers; quibble a little, but his points still stand. And he does a superb job of putting everything in perspective.

    It's available from Netflix.

  34. Regarding the question about mining stocks... do some DD on CDCH & MDMN. They're a couple of pennies working on a JV deal. According to their website all that's left is the money transfer, which is about 5 weeks past deadline due to homeland security holdups. Don't believe me. Do the research and watch the trading. Big money has been accumulating for a month. I own both.

  35. March OI falls 28,275 to 19,544. Still more than Blythe would imagine.


  36. Ah well - I can see already as someone said before they spiking the dollar because some Europe (Italy) shit. But even against a risky currency such as the South African rand the dollar is tanking and I am not being compensated by PM's and miners at all. It really is frustrating. This shit needs to end.

  37. Thanks Victor,
    The options intrigue me. I need to bone up on the collar trade. I am more familiar with verticals and condors. On 2013, might they go this far out to reduce theta decay? Gains from movement would not be affected much. Thanks for doing the math.

  38. Is consensus that there will be another raid today?

  39. Yes, another raid, NYMEX oil is behaving the same as last raid. Expect a drop during trading hours.

  40. for silver_swan.. repost of last post commentary:

    top 3 or
    GMXR (theres time still as i believe to get in)

    top 5
    TARSF (will respond well to increased investor awareness and positive exploration results)

    and so on..
    HTM i personally love this company i really do think it is a sleeper stock and geothermal is .. well u gotta research how crazy it is compared to the ...fad solar and wind stocks..

    i sold off my position of PIP with slight losses but i think if the govt pulls another false flag trer atk it may benefit we shall see

    also .. i called SHZ a short time ago made a good well relatively moderate gain of round 75% but its in china and is currently mining REEs .. i am unsure, as with limited funds and time i believe, to catch its next rebound.. worth a glance every now and then id say

    ... I STILL WANT BETTER IDEAS THAN SHORTING JPM mr. that guy aka anonomous


  41. It is just a trade using the credit from one to buy the other. They went to 2013 for time value, the vig sticks around longer on longer dated contracts, and they are betting on a move one way or the other, obviously. OR they are expecting major volatility and expect to make it both ways, which is likely over 2 years. Regardless, 2013 makes sense because of the time value and look how cheap those contracts are? $400 a contract for 2 years for a trade to work out so close to spot is smart, IMHO. We just do not know which were buys and which were sells or is they were both buys or sells. Lots of strategies can use this, I am choosing the easiest ones as my guess.