Calls (explain this) lock in the price of buying the exchange-traded fund (explain this), which tracks the price of silver. The options can generate some nice leverage if the stock climbs, but they can lose all of their value from just a small decline.
There was plenty of activity in other strikes, including September 28, August 27.50, and August 28.
The fund rose 1.56 percent to $27.39 yesterday. Calls outpaced puts(explain this) in the fund by about 4 to 1, reflecting the session’s bullish sentiment. Total volume in the name was almost twice its daily average.
—By CNBC Contributor Pete Najarian
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Options Trading School:
Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC’s “Fast Money” and co-founder of OptionMonster.com. Najarian has no positions in SLV.