Hey all,
I took a chance into Friday's close on SLV and bought some calls. While volume and momentum suggest a counter trend rally may bring prices back price up a bit - this market is still very weak. When doing this week's CTS report SLV stood out (along with most metals markets) as especially weak and one a smart investor ought to just leave alone.
Bearishness persists as the market gaped lower on the open this Monday morning as margin requirements were raised by the exchange. We did get another buying opportunity early this AM (as suggested when I entered the trade) and I bought another 5 of the October $35 calls at $.50. This brought my average cost on the position (excluding commissions) down to $.625. The market did rally and the options did start to move higher. Even though still down on the day, SLV did rally enough to actually put the market in a short term overbought condition. As a result, I thought it was best to just slide off to the sidelines and take a small loss on the trade. I did that by selling the entire 10 contracts at $.62. With commissions, the trade worked out to about a $60 loss. While not happy with the loss, I think its best to just let this market settle down a little before risking our hard earned (and easily lost) capital.
That's all for this post,
Brian Beamish FCSI
The Canadian Rational Investor
the_rational_investor@yahoo.com
the-rational-investor.com
All appropriate disclaimers apply, DO NOT risk capital in options trading that you cannot afford to lose.
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