Bulls double their money in $SLV

The iShares Silver Trust has risen with the recent rally in precious metals, yielding significant gains on upside option positions.

On Nov. 19, Investitute’s tracking systems found that 6,400 $15 calls expiring on April 18 were purchased in one print for $0.31 with shares at $13.54. Volume was well above the strike’s open interest of 4,474 contracts before that session began, showing that this was a new position. Investitute co-founder Jon Najarian chose SLV as his final trade on CNBC’s “Halftime Report” last week, citing unusual call activity.

The April $15 calls traded up to $0.62 this afternoon, twice their purchase price. The stock rose 9.23% in the same time period, showing how options can far outperform their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

SLV was up 1.3% today to close at $14.75. Investors have flocked to silver, gold, and their exchange-traded funds as relative safe havens during market volatility.