Buy Alert: June 12, 2015

Buy Alert: June 12, 2015

 

Option Strategy:

Buy Silver Wheaton $SLW July 17, 2015 $18.00 puts for $0.60 or better.

 

Commodity Outlook: Silver

Bears are in control of silver…

The precious metal is firmly under $16 an ounce today and looks as though it will extend its losses next week.

As you’re likely aware, our iShares Silver Trust $SLV $16.50 puts are hitting a bid of $1.34 in today’s session- a gain of 100% from our entry at $0.67.

Be sure to lock in some profits on that trade if you haven’t already!

But with silver still acting very weak, I think we have another shot at profits in a put trade.  This time we’re betting on downside in a silver producer…

 

Resource Trade: Silver Wheaton $SLW

As long time subscribers likely remember, we’ve traded $SLW from the long side in the past.

But this time we’re betting on a decline…

$SLW is currently trading at a minor support level near $18.50.  Given the weakness is silver, $SLW will likely give up $18.50 and drop to the next support level at $18.00.

If things really get bearish for silver in coming weeks, $SLW could drop all the way down to 52-week lows at $16.50.

So here’s what we’ll do…

Buy the $SLW July 17, 2015 $18.00 puts for $0.60 or better.

The current bid/ask spread for this contract is $0.49/$0.51.

Do not pay more than $0.60!

Our official entry price for performance tracking is $0.51.  Your price may be higher or lower.

Exit Strategy:

Remember, we want $SLW to trade lower.  Our first profit target is $18.00 while our second target is at $17.00.

Our risk control line for this trade is at $19.00.  If $SLW trades above that level, conservative investors should consider closing this trade to preserve capital.

 

Category: Commodity Trading