It occurs to me this Tuesday morning in January that Silver is putting in a historical run, some might say parabolic, that is a rare and wondrous opportunity for option traders. I've been looking over the February and March monthly option tables with an eye on where maximum leverage may lay. My conclusion, out-of-the-money calls with at least 30 days to expiration. Current Option Tables: SLV Jan Deep-In-The-Money Calls SLV Feb At-the-Money Calls SLV Feb Out-of-the-Money Calls Conclusion: Significant additional leverage is gained by trading this historical run in Silver with out-of-the-money calls. In the land of, "there ain't no such thing as a free lunch, those OTM calls will get hit hardest if and when SLV has a set-back. Nonetheless, my assumption is that if Spot Silver sees the $90's (currently @ $88.65) then the run to $100 will be all but baked in. Spot Silver Game Plan: If $90, then $100. Current PRO Options If Spot Silver moves into the $90's, roll-up the at least half of the SLV Feb $75C (up 23.7% today) to the SLV Feb $100C, (up 34.2% today) with a tight 50% trailing stop. Alternatively, roll at least half the proceeds from the Jan $50C (up 12% today) into the Feb $100C.
