SLV (iShares Silver, Expense Ratio 0.50%) June 19 calls traded in good size yesterday and with the ETF trading in the $18.70 range, these options are slightly out of the money.
We note that SLV has traded as low as $18.26 on an intraday basis on three occasions since last December, and before yesterday’s intraday reversal, was in danger of trading near these levels once more.
Each time SLV has plunged to the aforementioned levels it has rebounded rather sharply and strongly, so it is possible that the recent call buyers are simply playing the potential for a similar move this time around in the metal and related long ETPs.
SLV has an impressive $6.5 billion in assets under management, and most recently has pulled in about $35 million via creation activity in recent days, and about $220 million year to date, in spite of flattish YTD performance and choppy intra-quarter action.
Leveraged funds are rather popular in the Silver space as well, especially among sophisticated traders and those trading directionally or on technicals. AGQ (ProShares Ultra Silver, Expense Ratio 0.95%) is actually the
second largest ETP after SLV in terms of assets under management in the entire Silver category, with about $464 million in assets under management currently.
Since there seems to be a bullish bias here at least in SLV in the short term, we will watch AGQ as well as USLV (VelocityShares 3X Long Silver ETN, Expense Ratio 1.65%) closely to see if there is any increase in interest in either of these, as both have been rather quiet lately.