Silver’s big, upside breakout continued yesterday as prices soared more than $1.00 per ounce, propelling the poor man’s gold halfway to our original price target of $25 per ounce. If you followed our suggestion 4 days ago (Alert #33) to buy December bull call spreads, odds are good the value of your spreads have increased enough to consider paring back some of the risk in this position.
For example, the December $24.00 / $25.00 bull spreads referenced in the “Alert” were going for roughly 15 cents ($750) when we issued the report. This morning they are trading for roughly 33 cents ($1,650). If you own more than one it might be a good idea to sell half. This more than covers your initial risk on the trade.
We’ll hold the second half of our position, looking for an eventual move to our $25 per ounce objective.
SUGGESTED ACTION: December bull cap spreads in silver: consider placing an open order to sell half of your bull spreads for at least twice what you originally paid. Let the other half ride.