Silver Wheaton

We are long 800 shares @ 14.91 against eight February 33 calls shorted for 1.94.  Do nothing for now, since the calls won't even begin to hurt us unless the stock rallies above 35.  We can only hope to experience that kind of pain! ______ UPDATE (10:07 p.m. EST):  Using a one-cancels-other order, buy eight February 36 calls if the futures trade either 33.48 or higher;  or 34.48 or lower. The lower number is a 'D' correction target and probably as cheap as the stock might get today.  However, a print at the higher number would indicate a bullish breakout, and we don't want the stock to run away from us.

We are long 800 shares @ 14.91 against eight February 33 calls shorted for 1.94.  Cover the calls if the stock gets within a dime of a longstanding target at 28.55.

We hold a long-term position of  800 shares with an adjusted cost basis of 14.91.  Since a selloff to 28.55 appears likely, let's try to hedge the position if SLW rallies to the Hidden Pivot midpoint associated with that target, 32.12. Accordingly,  I'll recommend shorting eight February 33 calls.  They should be trading for around $2, but to get the right price you should monitor the bid/asked spread as SLW approaches the target. ______ UPDATE (Tuesday, January 18, 11:56 a.m. ET):  The stock opened on a gap to 32.42, allowing us to short the calls for the rigged price of  1.94.  (The market makers were quite obviously buyers of this series.) Do nothing further for now. Our position is a covered write -- insurance against further weakness, but with no upside cost if the stock is 34.94 or lower.

We hold a long-term position of  800 shares with an adjusted cost basis of 14.65.  The correction could hit 31.34 before SLW turns around. Let's plan on buying 400 more shares at 31.40, stop 31.14. _______ UPDATE (11:31 a.m. ET): Stick to the stop, since SLW could fall to 28.55 if it doesn't find traction at these levels.  _______ FURTHER UPDATE (12:10 p.m. ET):  We were stopped out for a 26-cent loss, raising our cost basis to 14.91. The selloff looks 80% certain to continue to 28.55.  If the stock rallies to that target's sibling midpoint, 32.12, we'll buy puts, but they are otherwise priced to discount the hereafter.

We hold a long-term position of  800 shares with an adjusted cost basis of 14.65.  That price takes into account gains on covered writes done along the way, as well as small losses on hedges initiated at short-term tops.  Yesterday's engineered selloff following a strong opening suggests not only that bulls are in control, but that they are inclined to use every cheap trick in the book to shake loose stock at favorable prices.  The fleeting peak on the opening bar has created an "internal" high with the potential to turbocharge the next thrust that exceeds a second, external peak at 40.24 recorded on December 13.  Until such time as that occurs, we should expect more sideways movement. ______ UPDATE:  My timing for hedging our position with eight Jan 34 puts purchased when the stock spiked to 42 exactly a month ago could not have been better; however, my timing for exiting those puts could not have been worse. Apparently, I wasn't the only one who got suckered by SLW's recent spike earlier this week to $40.  In retrospect, I should have advised rolling the puts into February.

We’re long 800 shares with a cost basis of 14.27 against eight January 34 puts held for 0.77.  Offer the puts to close for 0.43, but raise the offer to 0.49 if the stock is trading 38.25 or lower.  These puts are criminally manipulated, as far as I can tell, so I'll further recommend that you pull the order if it hasn't been filled within ten minutes of the opening bell. _______ UPDATE: We did nothing, since the puts traded no higher than 0.35.  Stay tuned, since we may try again later in the week or early next. _______FURTHER UPDATE (3:21 p.m. ET): In the chat room, I've recommended closing out the puts for 0.38, good for the remainder of the day.  (Closing note for Thursday:  The puts were 0.38 bid in the final minutes of the session, so I'll consider the order filled. They gave us protection when SLW was falling hard but have since outlived their usefulness. The 0.38 these options cost us will be added to our stock price, giving us a new basis of 14.65.  The next time we short into a spike, we'll use call options, not puts.)

We're long 800 shares with a cost basis of 14.27 against eight January 34 puts held for 0.77.  Offer twelve January 32 puts short for 46 cents, day order.  Our goal is to limit premium risk without negating our hedge. SLW's last two swoons have not quite reached their Hidden Pivot targets, implying that sellers are running out of steam. _______ UPDATE:  Let's try again today (Tuesday), since the put options we were trying to short traded no higher than 0.36 on a swoon at the opening.

 Long 800 shares with a cost basis of 14.27 against eight January 34 puts held for 0.77, we'll leave our hedged position unchanged for now, since Silver Wheaton has been working on a bearish impulse leg since last Friday's stab lower on the hourly chart. The stock remains vulnerable to a fall to as low as 35.05 as it noodles around near the 37.645 midpoint support associated with that target.

We’re long 800 shares with a cost basis of 14.27 against eight January 34 puts held for 0.77.  We missed shorting Jan 32 puts against the position on last week's weakness, but we'll stick with the strategy. Continue to offer eight January 32 puts short for 0.72, good till canceled.