Silver Wheaton Call Options Surge Ahead of Earnings (SLW)

Posted in General, Options 
July 28th, 2008

We love looking for very unusual options trading to look for flags that might now show up in the trading volume.  Silver Wheaton Corp. (NYSE: SLW) is a name that almost never shows up on a the most active call options list.  But as of 12:45 PM EST this Monday we have seen this silver producer’s option highly active just one day ahead of the earnings report.

The AUG08 $15.00 CALLS have traded more than 2,000 contracts.  But the big kahuna is 22,510 contracts of the SEP08 $15.00 CALLS, which had an open interest of 9,575 contracts before this.  We’ve also seen 2,312 contracts of the SEP08 $17.50 CALLS trade hands.

Since coming public in 2005 this stock is up some 300% or so.  It’s hard to imagine what is being expected out of the norm for earnings, but someone sure seems to be acting like they know something.

20,000 contracts represents 2,000,000 shares on a fully leveraged basis, yet the average daily volume in the stock is only about 3.1 million shares.  So far shares today are down 0.4% at $14.57 and the 52-week trading range is $9.72 to $19.54.

Jon C. Ogg
July 28, 2008

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