SLV/GLD Ratio
05/05/2011 8:18 am 1 Comment
The ratio is in free fall.
SLV 20ema Retracement
05/02/2011 1:06 pm Leave a comment
Silver margin requirements raised leading a large selloff in /Si today.
SLV seems to find support at the 20ema.
SLV Open Interest
04/26/2011 5:11 pm Leave a comment
The blue boxes are JAN 13 expiration. You can ignore the red JAN12s. This is a graph of open interest in the CALL and PUT side respectively. I’ve learned the best way to interpret this data is that a larger open interest implies a speculative short contract position. This is a zero-sum market but the long is hedged and traded away. A position of that size which is that deep ITM likely had the majority of it opened as a short position. Since it’s a sell you look at this and assume they’re betting that the underlying will go below the CALL strike and stay above the PUT strike by a certain date.
When you analyze this trade, taking into account the ratio between the CALL and PUT open interest you see a prediction for a move to 20 over the next 2.5 years. The ratio spread is similar to a strangle but you can see they leveraged the ratio to move the steepest losses to the range of 20 to 0. The payout is at it’s highest at $20/sh where it pays 8:1 and breaks even between 4.32 and 46.17. It’s closing price on 4/26/11 was 44.03.
Thursday Update
11/18/2010 8:06 am Leave a comment
- Metals are up after their pullback due to increased margin requirements.
- Yields are up causing a drop in Treasury prices across the board.
- Looking for a possible retracement back to the broken TL on the S&P 5m chart here.
Took some profits on the gap up in the opening, got out of $USD on weakness, started a position in SDS on market strength to protect profits still on the table. We feel bullish today on a pullback that does not break support levels on the SPX 5m chart posted above. Will continue to take profits into strength.
Zevon's Log 
