DailyPlay – Opening Trade (SLV) – January 25, 2023

SLV Bullish Opening Trades

View SLV Trade

Strategy Details

Strategy: Cash Secured Put

Direction: Bullish

Details: Sell to Open 1 Contract March 17th $21 Cash Secured Put @ $0.55 Credit.

Total Risk: This trade has a max risk of $2,046 (1 Contract x $2,046).

Trend Continuation Signal: This is a Bullish trade on a stock that is experiencing a neutral to bullish trend.

1M/6M Trends: Neutral/Bullish

Technical Score: 9/10

OptionsPlay Score: N/A

Entering the Trade

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

Investment Rationale

Stocks were mixed on Tuesday with the Dow higher, but the SPX and Nasdaq were marginally lower. After the bell, we got MSFT and TXN earnings, and after initially seeing the former rally 4%, it ended up giving back all those gains, and then some, after the conference call. As I write this, the S&P futures are down 45 bps. and the NDX 75 bps.

You know that I am bullish the precious metals, and I noticed that last week the iShares Silver Trust (SLV) sold down to its weekly cloud model and immediately bounced. I think that low is a good trading low, and as such, I will propose the following to get long exposure: sell Cash Secured SLV Mar. 17th $21 Puts. Yesterday, this strike closed at $0.545 mid, meaning you’d receive a credit of $54.50 for each put you’d like to sell, with the understanding that you’d be a willing buyer of SLV if exercised. Given my belief that both gold and silver will be higher down the road, consider this as a way of getting long silver at a discounted price if exercised OR simply collecting the premium if not exercised. Notice the top of the cloud remains pretty flat for the entire first half of the year.

SLV – Weekly