re: SLV

Yeah I'm about get back in on this action.

Bought a block of PSLV.

Premium discount, and I believe they actually own real silver. SLV has pretty much confirmed they use silver leases.

Google Eric Sprott. He knows a thing or two about silver. I'm not a conspiracy guy, but anyone who invests in silver, real silver, or paper, does need to understand that JP Morgan Chase routinely manipulates the prices in the futures market. There is a report of open positions by institutional investors. JP Morgan Chase has over 17,000 short contracts out there. They claim they inherited this from Bear, and are only hedging their customers positions. The % at one time was over 50% of the world's short silver position.

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JP Morgan Chase routinely manipulates the prices in the futures market. There is a report of open positions by institutional investors. JP Morgan Chase has over 17,000 short contracts out there. They claim they inherited this from Bear, and are only hedging their customers positions. The % at one time was over 50% of the world's short silver position.

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If that's true, the amended final regs of the Volcker rule which passed this week should stop banks from proprietary trading, including on commodities. They will still be allowed to hedge customer's positions on behalf of customers but will not be allowed to trade for their own profit.

Thank you for the explanation of the difference between PSLV and SLV.

Well, it's different for everyone.

I own PSLV, and when it recovers I'm going to sell it and buy physical silver.

After I complete the above, I'm only going to trade options on SLV. PSVL doesn't have options available.

If I can buy the right to buy 100 shares of SLV at a price of $16 all the way to 2016 for $490.00, I personally think it is foolish to own paper shares of something that likely can't meet its redemption obligations

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So bottom line is investing in PSLV is better option than SLV?

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I'm going to stick with SLV for my day trading purposes. PSLV's trading volume is too low for my taste, meaning it is less liquid than SLV. The PSLV trading volume today is less than 10% of SLV's volume.

Iowa explained part of it in his post above when he said PSLV does not have options associated with it.

I was going to buy back in at 2:45, and then got caught up at work (God forbid), and missed the closing bell.

The trade I actually executed for those interested follows:

Bought 2 SLV 01/17/15 19 Calls
Sold 2 SLV 01/15/16 27 Calls
Sold 2 SLV 01/17/15 27 Calls
Bought 2 SLV 01/15/16 16 Calls

Total cost was 1132.10

The two naked calls I sold are covered (although still considered naked) by the 2 calls I purchased. I've limited my upside to about $3,800 less cost to buy the calls if SLV is at about $29.00. the only real downside is that if SLV is trading below about $21.90 and 19.90, I lose my $1132.10. If it goes through the roof, I have to sell 400 shares at $27, which I will buy for 16 and 19.

SLV closed today at $18.81, and up another .04 in after hours. Large open interest on all of these LEAPS for 2015 & 2016, although lighter volume than one would expect. Fairly common, when the price drops, most follow the leader. I tend to do the exact opposite.

The interesting action took place with futures contracts, and options on these contracts. The spot price is up overseas as I type this. SLV now sells at a discount to it's alleged NAV:
NAV $19.63
Premium / Discount 0.15%

A small trade because I'm not sure silver has reached its bottom. If it keeps going down, I'll likely buy back the calls I sold at a minimal profit, and let the $16 and $19 dollar calls ride.

At that point I just need SLV at $18.83 and $21.83, although even SLV at a $1 lower would still probably mean the calls are more valuable than what I paid for them.

Didn't mean to bore anyone, just trying to explain how I like to trade based off of both volatility and fundamentals. Best case scenario, the $27 calls expire worthless, I keep the premium I collected, and SLV is as high as possible before it would make the calls I sold worth executing.

Bought 2 SLV 01/17/15 19 Calls - $2.30
Sold 2 SLV 01/15/16 27 Calls - -$1.12
Sold 2 SLV 01/17/15 27 Calls - -$.47
Bought 2 SLV 01/15/16 16 Calls - $4.88

Net debit of $5.59.

Three Indicators to Turn Your Trust Back to Precious Metals
~ by John Paul Whitefoot, BA
John Paul Whitefoot
John Paul
Whitefoot
Despite the wintry Arctic chill, the economic recovery is in full bloom. Or is it? Wages are stagnant, unemployment remains stubbornly high at seven percent, and consumer confidence remains tepid at best. The average American investor clearly isn't enjoying the Wall Street perpetual momentum machine.
Are stocks fairly valued (i.e. cheap), and is the current momentum sustainable? If you consider the charts, it looks like well-heeled investors think the market is inexpensive; how else can you explain the current bull market marathon? This is after an increasingly larger number of companies on the S&P 500 warned about revenues and earnings.
In the third quarter, a record 83% of all S&P 500 companies revised their third-quarter earnings guidance lower. So far, 92 of the S&P 500 companies, or 89%, have already issued negative earnings guidance for the fourth quarter. In spite of the warnings, the markets continue to tread higher.
I'm not the first person to say you can't beat the Fed; but this market proves it every day. Thanks to the Federal Reserve's $85.0-billion-per-month easy money policy, the markets just go higher and higher.
So, are the markets fairly valued? Not if you think S&P 500 revenues and earnings are important. Over the last few years, companies have been doing a good job at cutting costs; in fact, corporate profits are at an all-time record high at 70% of GDP. (Source: "Corporate Profits Are At An All-Time Record Peak At 70% Of GDP," Forbes web site, November 30, 2013.)
S&P 500 earnings are also being artificially inflated due to low corporate tax rates. While the top corporate tax rate is 35%, few companies pay that once deductions, credits, and loopholes are factored in. Thanks to a growing deficit, Washington will be looking for ways to generate cash, meaning the tax rate will most likely climb higher, which also means corporate profits will dip. (Source: "Corporate Taxpayers & Corporate Tax Dodgers 2008-2010," Citizen for Tax Justice web site, November 2011.)
The near-record-low interest rate environment is also helping S&P 500 companies report deceptively solid numbers. According to one report, the low-interest-rate environment has helped boost corporate profits in the U.S. and U.K. by five percent in 2012 alone. At the same time, households in the U.S. and U.K. lost a combined $630 billion in net interest income. (Source: "QE and ultra-low interest rates: Distributional effects and risks," McKinsey & Company web site, November 2013.)
Low interest rates mean companies can issue low-cost debt and use the proceeds to repurchase shares. By reducing the share count, organizations can inflate their earnings. More than 80%of the S&P 500 companies are currently employing this strategy, and at the fastest pace since the 1990s. (Source: Perlberg, S., "GOLDMAN: Here Are The 23 Best Stocks For Fat Dividends And Huge Buybacks," Business Insider web site, October 10, 2013.)
As long as interest rates are artificially low, companies will continue to borrow and buy. Especially when you consider that more than 40% of the yearly gain in earnings-per-share (EPS) growth by S&P 500 companies has come from share repurchase programs. (Source: Condon, B., "Narcissist's rally led by giant stock buybacks," USA Today web site, May 18, 2013.)
With stocks going up irrationally, now might be the time to consider those precious metals that have been unfairly punished in step. When it comes to standing on its own, I trust gold and silver more than I do financially engineered stocks.