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A Silver Trade That Looks Like Gold

I am not a precious metal trader, but I was drawn to SLV.
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I am not much of a precious metal trader. In fact, I am not a precious metal trader.

Today I was looking at Industrial Select Sector SPDR Fund (XLI) as a potential trade. I think there is room for it to move higher. Yes, it has some airlines and Boeing (BA) exposure. But in truth, the major holdings are mostly rail and defense.

That is how I got drawn to iShares Silver Trust (SLV) .

Silver is an industrial precious metal with real use. It tends to rally with the economy while carrying some inflation exposure to it. Lately, the former has driven the price more than the latter.

The ETF does have some higher implied volatility (IV), but the underlying is so cheap that I do not mind buying calls.

The SLV June $14 calls are around $0.70. That is cheap, and I believe they will be worth double.

Trade:

Buy to open 1 SLV June 19 $14 call for $0.70.

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At the time of publication, Sebastian had no positions in any securities mentioned.