I entered a silver position today and for the first time since the selling all my positions at 48. I am utilizing a long dated deep in the money Call strategy, buying Jan 2013 30 Calls. I filled at 10.05 or $1005 per contract. My thinking is that the next move in silver will likely revisit the highs and then blast off higher. I need time because gold will have to underpin silver and make up for its handicap as an industrial metal in a worsening economy. I also am entering in a limited fashion, with 2 more buys coming during pullbacks. The potential for this trade is around $23 for a timely re-test of 48, say within what is left of the year. The gap today bothers me, but 5% of gaps do not fill and this one could be one of those. The gap at 46 however is a magnet and will certainly fill.
Here’s the chart: