Tuesday, April 12, 2011

Daily Research Summary 4/12/11


Submitted by: Francis Soyer

Yesterdays sell off in Silver as caused by a $1,000,000 dollar bet by COMEX (Crimex) that SLV would fall to $25.00 an ounce by July is the main suspect for the retreat. However, taking a closer look at this trade that went through something interesting to note. For one thing, half the daily volume were calls, and check out the total Open Interest (People Short This Downside Bet) This says that there are 3.2 million contracts betting against SLV would ever reach $25.00 By July. This is hardly a large bet that SLV will fall as described yesterday in the media. I suspect this may have even been a trade error. Or a larger player is using their weight to spin some headlines to get longer at a discount. The other possibility is that a trader on a desk probably fat fingered the key board when executing an order for July 35 Puts and his/her ass is grass today with the portfolio manager. It does happen unfortunately.


Symbol    OptVolume       Puts          Calls           AvgDailyVol    OpenInt

SLV          698,162            382,221    315,941       228,700          3,270,383



Unfortunately by the time everyone figured out this was a bogus move down SLV this morning is already recovering thus eliminating the chance to leg in further at a discount.
Japan raises nuclear threat to highest level


Ivorian leader promises reconciliation

France: Says NATO not doing enough in Libya

Swaziland protest organizers arrested

Asian indices were in the red with the Nikkei down 1.69%. Major European indices are down and US futures indicate a negative open.
UK retail sales fell 1.9% year-over-year in March, the steepest decline in six years. Non-food retailers took an especially hard hit and the pound slid against the dollar on the news
German investor confidence plummeted in April due to rising oil prices and the ECB rate hike

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