SLW

We hold 800 shares with a cost basis of 14.27, yielding a theoretical gain of about $21,264 with the stock trading around 40.85.   Because SLW is closing rapidly on the 42.37 target given here a while back, let's try to put on a hedge when it gets there by buying eight January 34 puts.  I've included a table with "fair" option values to help guide you, since you should try to buy a few puts when 41.65 is reached. (That's an alternative target where SLW could conceivably top.)  If the stock ultimately hits 42.37, a price of 0.44 (per the tabular data) would be doing pretty good for the Jan 34 puts.  _______ UPDATE (12:24 p.m. ET):  The 42.37 target came within three cents of nailing the high of a wicked, opening-bar gap, but the put options were criminally mispriced at the time.  The stock has since collapsed $2.80 from this morning's 42.34 high, so partial profit-taking is in order on any hedge initiated at the top.  Please let me know in the chat room whether, and how, you used the target.

SLW is headed higher, potentially on a rampage in December to 41.65/42.37, but because a lesser Hidden Pivot resistance at 37.41 could temporarily chill the rally, we'll leave our defensive call spread untouched. To put it out of mind as well, let's adjust the cost basis of the 800 shares of stock we own upward to 14.27, giving us a paper profit of $18,000 on the position. We needn't worry about exiting the spread either, since exercise and assignment will cancel each other out if SLW is trading above 30 at expiration.  We should also plan to short eight December 30 puts if the stock falls after touching 37.41, since that would add nothing to our risk above 25. Let's be ready now with a g-t-c offer:  eight Dec 30 puts  @ 0.27. (They closed yesterday @ 0.11.) _______ UPDATE (December 6):  The stock has continued relentlessly higher without pulling back, so we never had an opportunity to short the puts. A small matter, though, since, at a current price of 40.56, the theoretical gain on our position is about $21,000.

We hold a long-term position of 800 shares with an adjusted cost basis of 13.07 against eight December 30-35 call spreads shorted for 3.80 at the recent high.  Let's try to turn the call spread into a butterfly by buying the December 25-30 call spread eight times for 3.60 or better, good till canceled. (It closed yesterday for around 4.00.)  We can't get hurt to the upside since our short spread is akin to a covered write, so we'll take our sweet old time waiting for the long spread to come to us at our price if we have to. _______ UPDATE (Nov 16, 12:16 p.m. ET): Cancel the bid for the call spread, since the spread we've got on should be protection enough.

We hold a long-term position of 800 shares with an adjusted cost basis of 13.07 and a theoretical profit of $17,600.  One can never be certain exactly where a parabolic rally will crest, but let's use a Hidden Pivot resistance at 37.16 as a possible target.  This will give us the wherewithal to try to leg into a December 25-30-35 call butterfly spread that would give us cheap protection against a relapse.  To implement this plan, we'll start by shorting the December 30-35 call spread eight times if and when SLW gets within 10 cents of the target. My rough estimate of how much the spread will be selling for is 3.85, so if you can get that much or more for it, you'll be doing great; if five cents less, still not too bad.  If we are able to sell the spread, we'll be looking to buy the December 25-30 call spread on weakness.  Our maximum risk on the short spread alone, assuming a sale at 3.85, would be $115 per spread, but that would be more than doubly offset by our corresponding gain on the long stock position. _______ UPDATE (10:12 a.m. EDT): With a spectacular lunge, SLW made a so-far high today at 37.20(!), pushing the December 30-35 call spread to a maximum price of 4.00.  We'll use 3.90 as our cost basis for the eight spreads we shorted, and for the time being do nothing further.  If we leave things as they are, the spread gives us 100% protection down to about $33. _______ FURTHER UPDATE: I see that someone in the chat room has reported a 3.80 fill on the spread -- 20 cents lower than the highest do-able price -- so that's the number we'll use for our cost basis.  The defensive short sale is not looking

We hold a long-term position of 800 shares with an adjusted cost basis of 13.07.  I'd raised the prospect earlier of doing some covered writes if and when a Hidden Pivot target above $28 is reached, but we'll put that plan on hold for now, since, like Silver itself, the stock looks to be consolidating for a shot at something bigger. ______  UPDATE (Sunday night, November 7):  SLW has shown such pluck blowing past a clear Hidden Pivot resistance at 32.95 (60m, A=26.07, B=30.27) that we'll let our profits -- currenly $16,000 on paper -- run some more before we try covered-writing the stock.

We hold 800 shares with an adjusted cost basis of 13.07.  There are two Hidden Pivot targets just above -- at 28.61, 22 cents beyond yesterday's high; and at 29.00.  As a hedge, I'll recommend buying four November 29 puts for around 1.05 if SLW gets within a nickel of the higher pivot. I may update guidance, so check back intraday.

Against 800 shares of stock we hold with a 12.95 basis, we bought four November 27 puts for 1.72 as a hedge when the SLW was topping recently.  The puts are still above water, but I'll suggest exiting them if they trade 1.62 or lower.  Meanwhile, although I identified a minor correction target at 25.16 in the chat room earlier today, the rally is within easy distance of negating it with a print above 27.00, the point 'C' of the bearish pattern. _______ UPDATE (10:16 a.m. EDT): SLW opened on a gap -- it does so most of the time -- stopping us out of the four puts at 1.48.  Imputing the 24-cent loss per contract to the cost of our stock will raise our basis by 12 cents, to 13.07.  The puts did their job and cost us little, partially insuring us against the more severe pullback that was possible from the last Hidden Pivot top.

We're long four November 27 puts for 1.72 against 800 shares of stock with a cost basis of 12.95. If SLW surmounts evidently copious supply at 27, look for a pop to as high as 28.61. Stop yourself out of the puts if they trade down to 1.52, but otherwise check for updates intraday if SLW falls, since we may try to spread off our premium risk.  ______ UPDATE (11:25 a.m. EDT): SLW head-faked to 27.27 on the opening bar, then collapsed.  Let's try to spread off our puts, offering six November 24 puts short for 1.75 g-t-c.  My immediate downside target is 25.24, a Hidden Pivot that comes from the one-minute chart, but a bullish reversal would be signaled subtly with a print at 26.15 .

A seller with a ton of supply evidently sat on Silver Wheaton yesterday, capping the stock even as Silver futures went bonkers.  Assuming bulls prevail, we can look for the SLW to reach 28.61, a Hidden Pivot, over the near term.  We hold 800 shares with a 12.95 cost basis, and I am once again going to suggest doing a covered write if and when the stock approaches the target. Short eight November 29 calls for around 1.55-1.60, stopping yourself out if SLW touches 28.81. The best way to get a fair price for the calls is to monitor the option bid/asked spread when SLW gets within 25 or so cents of the target.  By the time it finally gets there, you'll know the market for November 29 calls well enough to offer them advantageously. I've included a snapshot of an option calculator that I used to approximate a fair price.  The 43.6 volatility -- the heart of the solution -- was interpolated from TradeStation data. _______ UPDATE (3:10 p.m. EDT): In the chat room a moment ago, I recommended buying four Nov 27 puts for 1.72 against our long position in the stock. (Note: The order was filled about 20 minutes later.)