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OPTIONS PLAY: COMEX SILVER Reaches Major Support

Commodities / Options & Warrants Dec 10, 2009 - 07:29 AM GMT

By: Matt_McKinney

Commodities

After this huge correction in COMEX SILVER it has touched MAJOR support.


MY ANALYSIS

Fundamentally, if the U.S. DOLLAR INDEX continues to rally we could see a change in trend in this market. However, I do not believe that there is any solid reason for the U.S DOLLAR INDEX to sustain a rally particularily because there is so much TARP MONEY left to spend. Therefore I'm convinced if COMEX SILVER can hold here we are going to retest and move through previous highs, but the next few days will tell.

Technically, COMEX SILVER has pulled back to a critical MA indicating a BUY if it holds here. See daily chart below.

OPTIONS PLAY

MARCH SILVER-$18.20/OUNCE
OPTION EXPIRY-FEBUARY 26TH
CONTRACT SIZE 5,000 OUNCES
LEVERAGE FACTOR-$1=$5,000
BUY 21.50-22.50 BULL CALL SPREAD

We also buy in a 3 to 1 ratio an outright PUT in case the market makes a MAJOR move against us.

Do you want to get more of our market insights?

Then please visit the McKinney Trading website today at http://mckinneytrading.blogspot.com for more news, analysis, and trade recommendations.

Disclaimer:                             
Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.

The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions and fees.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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