$SLV call positions shine

Bullish option traders’ call positions are shining today in the iShares Silver Trust (SLV).

On Mar. 7, Market Rebellion’s Unusual Activity Service found that 5,000 Weekly $23 calls, expiring Apr. 26, were bought for $0.59 with shares at $22.32. This was clearly fresh buying, as there was no open interest in the contract before the activity appeared.

Those calls have sold for as much as $4.23 today, a 616.95% return, while the stock rose 21.68% in the same time period, underscoring 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.

The SLV was last up by 1.36% to $26.36 today.