iShares Silver Trust ETF (SLV) Options Fly as Metals March Higher

The iShares Silver Trust ETF (SLV) is on track for its highest close since last May

by Alex Eppstein

Published on Apr 19, 2016 at 10:49 AM

Precious metals are on fire today, led higher by silver -- which hit a 10-month high earlier on Chinese buying, a weaker dollar, and reports that hedge funds have been upping their holdings in the commodity. Accordingly, the iShares Silver Trust ETF (SLV) is up 4.7% at $16.15, and options traders are piling on.

At last check, SLV options are trading at twice the usual intraday rate. One of the most active strikes is the May 15 put, where it looks like a mix of buy- and sell-to-open activity is taking place. If that is the case, the buyers expect SLV to retreat below $15 by front-month options expiration -- at the close on Friday, May 20 -- while the sellers anticipate the underfoot level will serve as technical support during the upcoming month.

Taking a step back, options buyers have been gravitating toward calls over puts in recent weeks. SLV's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 4.24 outstrips three-quarters of readings from the past year -- with long calls besting puts by a more than 4-to-1 margin.

On the charts, the iShares Silver Trust ETF (SLV) has had a sensational 2016. Year-to-date, the exchange-traded fund (ETF) has racked up a more than 22% gain, and is on track for its highest closing price since May 22.

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