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October 10, 2012  Wed 9:58 AM CT

SLV: SEE CHART GET CHAIN FIND STRATEGIES
Bearish plays dominate the unusual options action today, and the iShares Silver Fund is one of the biggest targets even as it rises.

The SLV is up 0.73 percent to $33.06 this morning after testing resistance at $34 for the last three weeks. But the previous rally off the 52-week lows below $26 in the previous two months was substantial, taking the exchange-traded fund back to levels last seen on the first day of March as it came off a high above $36 set the previous day.

Today's option volume is topped by a large combination trade in the January 2015 options. A trader bought 16,650 of the 26 puts for $3.55 and, at the same time, sold the same number of the 38 calls for $4.65. The volume was slightly more than open interest at each strike, indicating that this is a new position.

This combination trade takes in a credit of $1.10, which will be the profit at expiration if the SLV is between the two strikes. It could also be a collar on long shares in the SLV, protecting against a decline below $26 but giving up any gains beyond $38. (See our Education section)
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