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September 13, 2012  Thu 9:43 AM CT

SLV: SEE CHART GET CHAIN FIND STRATEGIES
The iShares Silver Fund is just coming off six-month highs, but a long-term trade is still looking for much higher prices.

Topping today's option volume is a long-term combination trade in the January 2014 contracts, which involves 15,000 each of the 45 calls and 25 puts. The calls traded for $1.62 and the puts for the bid price of $2.24, according to optionMONSTER's Heat Seeker system.

The trader appears to be using the credit from the put sale to offset the cost of the long calls. The small credit will be the profit if the SLV is between $25 and $45 at expiration, but the real gains will come if the fund is above that $45 level at that time. The SLV was above $48 in April of last year. (See our Education section)

The SLV is down 0.81 percent this morning at $21.95. This adds to losses from the previous session as it has been unable to break up to $44 in the last week, though yesterday's open was the highest since early March. Shares were down at a 52-week below $26 in early July.
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One of the appealing features about options trading is that different options can be combined to create a large variety of risk vs. reward profiles.

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