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October 5, 2012  Fri 4:15 AM CT

SLV: SEE CHART GET CHAIN FIND STRATEGIES
The iShares Silver Trust has been active for months, and upside option activity in the exchange-traded fund is lighting up our systems once again.

Calls dominated yesterday's trading as buyers piled into the fund early, our Heat Seeker tracking system shows. The October 34 calls saw more than 9,000 contracts change hands, while the November 35.50 options traded more than 5,000 times.

Those calls lock in the price investors must pay to buy shares in the silver ETF, so they can generate some nice leverage with a rally. But these options will expire worthless if the stock doesn't move. (See our Education section)

The SLV rose 1.25 percent to $33.93 yesterday and is up 23 percent since early July. It's been holding around these levels more recently, but yesterday's call buyers don't seem to think that it will stay here much longer!

More than 142,000 contracts traded in the session, compared with average volume of about 109,000. Calls outpaced puts by 93,000 to 50,000.

(A version of this post appeared on InsideOptions Pro yesterday.)
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