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Bulls Come Back to This Silver Fund

Silver bar and coins
Thomas Northcut | Photodisc | Getty Images
Silver bar and coins

The iShares Silver Trust has been active for months, and upside option activity in the exchange-traded fund is lighting up our systems once again.

Calls dominated yesterday’s trading as buyers piled into the fund early, according to OptionMonster’s tracking systems. The October 34 calls saw more than 9,000 contracts change hands, while the November 35.50 options traded more than 5,000 times.

Those calls lock in the price investors must pay to buy shares in the silver ETF, so they can generate some nice leverage with a rally. But these options will expire worthless if the stock doesn't move.

The iShares Silver Trust rose 1.25 percent to $33.93 yesterday and is up 23 percent since early July. It’s been holding around these levels more recently, but yesterday’s call buyers don’t seem to think that it will stay here much longer!

More than 142,000 contracts traded in the session, compared with average volume of about 109,000. Calls outpaced puts by 93,000 to 50,000.

—By CNBC Contributor Pete Najarian

Additional News: Silver Bulls Dig for the Mother Lode

Additional Views: What’s the Better Buy—Gold or Silver?

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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.

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