DailyPlay – Opening Trade (SLV) – October 5, 2022

SLV Bearish Opening Trade

View SLV Trade

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish

Details: Buy to Open 36 Contracts Nov. 18th $18.50/$17 Put Vertical Spreads @ $0.34 Debit.

Total Risk: This trade has a max risk of $1,224 (36 Contracts x $34).

Counter Trend Signal: This is a Bearish trade on a stock that is experiencing a bullish trend. 

1M/6M Trends: Bullish/Mildly Bullish

Technical Score: 8/10

OptionsPlay Score: 123

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade. 

Please note these prices are based on the previous day’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. This will be reflected in the Portfolio tab within the OptionsPlay platform.

Investment Rationale

With the strength of the US Dollar, gold and silver have broken below their key support levels. After breaking the major $20 support level in early May and collapsing to $16, the pullback in the US Dollar this week has Silver rallying to levels just shy of this key $20 resistance level. Given the macro headwinds of a slowing global economy and persistent dollar strength, the risks skew to the downside. Moreover, this rally puts silver a full 2 standard deviations above its 40 period moving average, generating a short signal. We are targeting a return back towards its Sept lows by purchasing a Nov $19/$17 Put vertical for a $0.55 Debit.

SLV – Daily