Hi Ho Silver

Source:

...investors properly positioned in silver futures and options may be singing that same tune in 2009. While the price of silver may remain volatile and unpredictable in the short run, we expect to see a significant advance in prices over the next 12 months...

The lone ranger may have made this line famous, but it’s our opinion that investors properly positioned in silver futures and options may be singing that same tune in 2009. While the price of silver may remain volatile and unpredictable in the short run, we expect to see a significant advance in prices over the next 12 months.

Let me be clear that we are not exactly certain on when the US dollar will resume a move lower or when the hyperinflation will kick into play, however we do feel both are inevitable. What we have suggested to clientèle is to buy $5 bull call spreads out into December of 2009. We have been accumulating these positions for clients between $1500/2000 per spread.

At current pricing we are advising our clients to position themselves long silver by purchasing the $15 calls and selling the $20 calls. The suggestion is to buy multiple contracts looking to trade out of a portion of the position into the first of the year on a move back to $12/12.50 an ounce looking to take most of your risk off the table. The thought would be to sit on the remainder for perhaps 6-9 months looking for Silver for December 09’ to return to $20/22 ounce...

Now, for some meat on why silver and why now. The CFTC has recently confirmed it is formally investigating accusations that in recent months the silver market has been manipulated. US banks raised their short positions in silver futures by 450%, controlling 25% of the open interest, according to the Wall Street Journal. Meanwhile prices have lost over 50% in value in just the last 4 months. It remains to be seen what, if anything will come from this investigation, but based on the tremendous move something smells fishy...

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