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April 28, 2006

Wall Street will love SLV, Fri., Apr. 28, 2006, 10:29 AM

The Street will absolutely love the trading action in the new Silver ETF (AMEX: SLV). Readers ought to go to the AMEX.com website and learn as much as they can because they are going to be seeing a lot of it.

They will see that SLV can be shorted, for example. But, just like GLD (gold bullion ETF) there are no options.


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Bill, Why do they start it so high? Scares away retail I guess. I.e. why did GOOG start at $100 and other stocks start at $10? /Jason

Jason is making a good point. Retail traders cannot easily buy 100 shares of a $131 stock. But this is where brokers ought to be facilitating trading of part lots. What's wrong with buying and selling 10 or 20 shares?

And why not wait until the XGD etf comes out (U.S. listed gold and silver miners ETF)? This ETF will come out shortly and will be a play on many of the intermediate producers, which you know are the ones I like best.

Posted by Posted by Bill Cara on April 28, 2006 10:29:32 AM | Category: Bullion , ETF

Discourse

Good Morning Bill,
Please keep the posts coming; as a litte guy retail investor you're insights are very helpful to formulate good decisions.

From a technical standpoint, do you see a failure of the Dow to surpass 11,400 and hold as possibly the start of the bear market.

Also, if the Fed raises rates again in May, what impact do you think it will have on REIT's.

Thank you for everything you contribute with the blog.

Posted by: cb [TypeKey Profile Page] at April 28, 2006 10:46 AM [link]

Jason:

There is a method to the pricing of SLV, check this out:

Dubbed iShares Silver Trust, shares of the ETF represent 10 ounces of the metal held in a vault. ETFs are baskets of securities that trade on exchanges like stocks, so investors can go short as well as long, and must pay broker fees to buy and sell shares.

Hopes this helps. I agree with you, they could have made it like, 5oz instead .

Posted by: C.Note [TypeKey Profile Page] at April 28, 2006 10:55 AM [link]

Bill,

Did you mean it can be shorted on DOWN ticks?

Posted by: Michael [TypeKey Profile Page] at April 28, 2006 5:08 PM [link]