24/7 Wall St. » ZSL

Against the Grain: Big Losers On A Winning Day (BDEL, RCON, KEYW, ACW, ZSL, EDZ, COWS)

Administrator — Tue, 27 Sep 2011 15:23:07 +0000

Perhaps it’s bargain hunting or perhaps hope is once again floating over a possible solution to Europe’s banking woes. Whatever it is, the DJIA is up nearly 250 points about an hour after the market opened this morning and the S&P 500 is up nearly 25 points. Both indexes have posted better than a 2% gain so far.

Gold has reversed its massive three-day decline to rise nearly 4%, to around $1,655/ounce, and silver is up more than 9%, to $32.74. Crude oil is also getting a boost, up nearly 4.5% at $83.73/barrel of WTI.

There are some losers as well. Biotech firm Biodel Inc. (NASDAQ: BIOD), Chinese business software maker Recon Technology, Ltd. (NASDAQ: RCON), security firm KEYW Holding Corp. (NASDAQ: KEYW), and vehicle parts maker Accuride Corp. (NYSE: ACW) are all down significantly.

Biodel Inc. (NASDAQ: BIOD) reported top-line results from a pump study of experimental insulins that failed to meet the company’s target profile. The company will cancel Phase 2 clinical testing, and basically start over again. Shares are down more than -25%, at $0.78, after setting a new 52-week low of $0.75. The 52-week high is $5.49. Volume is about 3x the daily average.

Recon Technology, Inc. (NASDAQ: RCON) is software services firm that provides automation tools to Chinese oil E&P companies. Shares are down more than -10% this morning, very likely due to recent disclosures of security holes in the SCADA software offered by multiple vendors. Recon has not been singled out, but investors are apparently not going to wait around. Shares posted a new 52-week low this morning of $0.86, before recovering to $0.95. The 52-week high is $6.49.

KEYW Holding Corp. (NASDAQ: KEYW) announced last night after the markets closed that it had failed to win a systems integration contract commonly referred to as ‘Aura’. Shares are off more than -20%, having posted a new 52-week low of $7.90, before coming back to $7.96. The 52-week high is $16.00. Volume is about 6x the daily average.

Accuride Corp. (NYSE: ACW) said this morning that it was selling a subsidiary to a new company formed by two private equity firms for an undisclosed amount. The company also lowered annual EPS guidance from $0.40-$0.50 to a range of an EPS loss of -$0.05 to a gain of $0.04. The company also lowered the top of its annual revenue guidance from $1 billion to $975 million. Shares are down more than -22% after posting a new 52-week low this morning of $6.32. The 52-week high is $16.34. Volume is more than double the daily average.

Several leveraged ETF bear funds are also getting hit hard this morning. The largest drop so far is in ProShares UltraShort Silver (NYSE: ZSL) a 2x-leveraged fund that seeks to double the daily drop in silver prices. With silver up around 9%, shares in this fund are down more than -21%, at $14.43, in a 52-week range of $10.63-$95.48.

The Direxion Emerging Markets Bear 3X ETF (NYSE: EDZ), which seeks to return triple the daily drop in the MSCI Emerging Markets Index, is down nearly -14% this morning, at $26.24, in a 52-week range of $15.78-$35.10. Volume is relatively light so far.

The Direxion Daily Agribusiness Bear 3X ETF (NYSE: COWS) is a triple-leveraged bet on a falling DAX Global Agribusiness Index. The fund is down more than -12% this morning, to $43.60, in a 52-week range of $31.67-$55.35. This fund is very lightly traded, with daily volume around 2,300 shares.

Paul Ausick

Filed under: HI/LOW Tagged: ACW, BDEL, COWS, EDZ, KEYW, RCON, ZSL

The Devil’s Metal Redux… Is Silver Above $40 Just Another Death Trap? (SLV, SIVR, PSLV, ZSL, SIL, SLW, PAAS)

Administrator — Mon, 18 Jul 2011 17:39:34 +0000

As the politicians in America play chicken with our prized Triple-A debt rating and as Europe is succumbing to its PIIGS, gold has eclipsed $1600 per ounce and now it has helped to pull silver back above that magical $40.00 mark. Maybe this time is different, but the massive run the last time felt like it took mere days (or hours) for silver to run up to $48 from under $35… That was from mid-March to late-April. Then the bubble popped and all the silver bugs were handed their costly bill for dabbling in the market at the peak. Silver’s rise above $40 again begs us to ask, “Is the Devil’s metal just bringing a new chance for investors to get burned?”

Maybe this time is different. Here’s a look at iShares Silver Trust (NYSE: SLV), ETFS Physical Silver Shares (NYSE: SIVR), Sprott Physical Silver Trust ET (NYSE: PSLV), ProShares UltraShort Silver (NYSE: ZSL), Global X Silver Miners ETF (NYSE: SIL), Silver Wheaton Corporation (NYSE: SLW), and Pan American Silver Corporation (NASDAQ: PAAS).

iShares Silver Trust (NYSE: SLV) closed $38.24 on Friday and shares are up at $39.32 after a gain of almost 3% today. Early last week the trust was under $35.00 and the 52-week range is $17.06 to $48.35.

ETFS Physical Silver Shares (NYSE: SIVR) is another physical holder of silver and its shares are back up at $40.09 on a 2.8% gain after Friday’s close of $39.01. This was also under $35.00 early last week and the 52-week range is $17.37 to $49.28.

Sprott Physical Silver Trust ET (NYSE: PSLV), technically a closed-end fund, peaked at $23.00 before the bottom fell out of silver. After a 3.5% gain today, shares are up at $18.87. Not bad for what barely a $16.00 price early last week.

ProShares UltraShort Silver (NYSE: ZSL) is getting crushed as it is the double-short play for silver. Its 6.4% drop today to $13.31 compares to a price of nearly $18.00 early last week. To show just how volatile, and deadly, this one is… Its 52-week high is $145.68. If silver rallies again through the roof and stays there, a reverse split of this exchange-traded product is likely.

Global X Silver Miners ETF (NYSE: SIL) tracks the miners rather than the metal, Its shares are up 2.6% at $27.75 today and it was close to $24.00 early last week. The 52-week range is $13.80 to $31.34.

Silver Wheaton Corporation (NYSE: SLW) is one the top silver mining stocks and its shares are up only 2% at $39.59 today. Only, well that is the bear market in stocks for you whether the Devil’s metal is in favor again or not. This was near $34.00 early last week and the 52-week range is $17.64 to $47.60.

Pan American Silver Corporation (NASDAQ: PAAS) is up only 0.3% today at $33.51, perhaps because the Canadian company’s operations are in Mexico, Peru, Argentina, and Bolivia. This was just under $32.50 a week ago and the 52-week trading range is $22.21 to $43.06.

Again, maybe this time really is different. Things are definitely more tense today than they were from March to the end of April. The problem is that we have been here before with prices rising rapidly in gold and in silver. We have also seen this game played out in the energy patch from 2007 to 2008 when the price rose every day for effectively the same reasoning. If silver takes on the extreme portion of gold’s rise and takes out new highs, then it may be the public’s last real asset grab for items that can be easily used for money and hold its value better than paper money.

Anything is possible, but it is at least worth asking just how different this time is for the Devil’s metal. Silver is a very small market for the amount of dollars that can be steered its way in a hurry. If you walk in one day soon and find that the margin for buying silver or gold has been raised again, don’t be shocked.

JON C. OGG

Filed under: Commodities, Currency, Metals, Trading Alert Tagged: PAAS, PSLV, SIL, SIVR, SLV, SLW, ZSL

Commodities Watch: Silver May Have Bottomed, The Devil’s Metal Lives On (SLV, SIVR, PSLV, ZSL, SIL, SLW, PAAS)

Administrator — Fri, 27 May 2011 18:09:56 +0000

Today’s commodities watch focuses exclusively on silver, The Devil’s Metal. It appears that the gray metal may have hit a floor although the exact level of that floor is arguable. The price of silver dropped -30% since its hit a high around $49/ounce in April. The low point was $33.49 in mid-May, and the devil’s metal has since recovered to around $38 today. That implies a floor of about $34/ounce, although one analyst puts the bottom at $32.

We looked at a dead cat bounce for silver earlier this month and want to re-visit the notion now that silver is recovering a bit. Here’s a look at iShares Silver Trust (NYSE: SLV), ETFS Physical Silver Shares (NYSE: SIVR), Sprott Physical Silver Trust ET (NYSE: PSLV), ProShares UltraShort Silver (NYSE: ZSL), Global X Silver Miners ETF (NYSE: SIL), Silver Wheaton Corporation (NYSE: SLW), and Pan American Silver Corporation (NASDAQ: PAAS).

iShares Silver Trust (NYSE: SLV) closed at a mid-May low of $32.85 and is trading at around mid-day today at $36.90, up about 1% from yesterday’s close. The trust posted a high of $48.35 in late April. Since May 20th the fund has shed about 7 million ounces of silver (about 211 metric tons), but its position did not change yesterday. That could signal a turnaround to more buying going forward.

ETFS Physical Silver Shares (NYSE: SIVR), another physical holder of silver, posted a recent low of $33.48 in mid-May and is trading at about $37.52 today, up nearly 1% from yesterday’s close. The fund posted a high in late April of $49.28.

Sprott Physical Silver Trust ET (NYSE: PSLV), a closed-end fund, peaked at $23/share before falling to a low of $15.19. The fund is trading at $17.59 today, up about 1.3% from yesterday’s close, and within a 52-week range of $9.75-$23.00.

ProShares UltraShort Silver (NYSE: ZSL), a double-short play, trades inversely to the price of silver. Shares hit a peak of $24.34 on May 5th, up from around $13.60 in late April. Shares are trading down about -2% today, at $16.80, within a 52-week range of $12.83-$155.04. This one is not for the faint of heart because quick moves are not uncommon.

Global X Silver Miners ETF (NYSE: SIL) posted a recent low of $23.22 in mid-May, but has recovered to about $25.28 today, up more than 1.5% from yesterday’s close. Miners don’t experience the same swings as do physical holders of silver or the metal itself. But the miners’ shares do react rising costs, ore quality, and expected production quantities.

Silver Wheaton Corporation (NYSE: SLW), one of the largest silver miners, posted a recent low of $33.75 in mid-May. The shares are trading at $36.51, up about 1% from yesterday, within a 52-week range of $17.64-$47.60. Another big miner, Pan American Silver Corporation (NASDAQ: PAAS), posted a recent low of $32.11 in mid-May as well, and shares are trading at $34.05 today, up about 1% from yesterday’s close. The stock’s 52-week range is $22.21-$$3.06 and Zacks just gave it another #1 rating (Strong Buy) as a value stock on weakness.

Comex silver has gained about 11% since hitting bottom. Physical bullion holders SLV and SIVR have matched that. PSLV is up about 13% and ZSL is up about 17%. The miners have clawed back about 11% as well.

The $34/ounce floor looks pretty safe and the $32 floor even safer. But there are things to watch out for.

Foremost is demand from investors, which is perhaps the most direct driver of silver pricing today. As the poor man’s gold, investment demand will continue to rise as gold prices rise. A related possibility is that industrial demand for silver, which accounts for about half of the metal’s demand, will drop. This is not likely, given the supply-demand projections for the year, but one never knows. There’s also a chance that we’ll see a dollar comeback. If the dollar rises too much against the euro, it is possible that safe haven silver investors will pull out.

One last thing to watch for is margin increases by the silver exchanges. Any margin requirements could rapidly change any prior opinions or technicals of a market as small as silver. There’s no question that the quick rises in margins at the beginning of May had an impact on silver investors’ decisions.

Silver may recently have established a new trading range from the low $30s to around $50. Historically the top remains in place for a while as the devil’s metal shakes off a sudden drop.

As far as silver itself and where it stands for traders, all you have to do is look at the stockcharts.com chart on the iShares Silver Trust (NYSE: SLV). It has an overhang at the 50-day moving average above, yet it never came close to the more critical 200-day moving average when the free fall was seen earlier in May.

Paul Ausick

Filed under: Commodities, Metals, Trading Alert Tagged: PAAS, PSLV, SIL, SIVR, SLV, SLW, ZSL

The Devil’s Metal, Looking For A Silver Dead Cat Bounce Yet? (SLV, SIVR, PSLV, ZSL, SLW, PAAS)

Administrator — Thu, 05 May 2011 15:33:03 +0000

The death of the silver trade is playing out even faster than the oil bubble popped in mid-2008. Silver is truly living up to its name “The Devil’s Metal.” The margin requirements have been raised handily, as they should have, and now the speculators have been forced out of what had been the biggest bullish move of 2011. Bank of America Merrill Lynch’s technical call of $80 silver is looking rather silly now, although it is still within its support lines and was not really meant as a straight-line call to $80…. This has been the worst week for silver in most of our lives going back to the very early 1980s, and it is becoming reminiscent of when the dot-com bubble popped.

We have taken a look at iShares Silver Trust (NYSE: SLV), ETFS Physical Silver Shares (NYSE: SIVR), Sprott Physical Silver Trust ET (NYSE: PSLV), ProShares UltraShort Silver (NYSE: ZSL), Silver Wheaton Corporation (NYSE: SLW), and Pan American Silver Corporation (NASDAQ: PAAS). The drop has become so severe, that it is going to be easy to expect that some traders, speculators, and investors may start looking for a bounce. It may just be a dead cat bounce, but that is for later.

iShares Silver Trust (NYSE: SLV) and ETFS Physical Silver Shares (NYSE: SIVR) are nearly tracking each other, although we would note that there may be more of a disparity in the asset values versus the market values due to the massive rise that happened last week. The iShares Silver is down 7.7% at $35.33 and the ETFS Silver is down almost 8% at $35.93. This has the iShares flavor of silver down 27% from its peak last week of $48.35 and the ETFS flavor of silver is down 27% from the peak of $49.28 last week. The SLV chart here shows that the latest move could still offer a lot of punishment ahead based solely on the moving averages but there may be support around $33 based upon prior trading.

Sprott Physical Silver Trust ET (NYSE: PSLV) is actually a closed-end fund and it is down 7.7% at $15.70 today and this peaked at $23.00 last week before its premium to the net asset value was highlighted by the media. Shares went out last Friday at $21.73, making a 27% drop just this week and a drop of more than 31% from the peak.

If you want to see just how zany the silver move has been, there is the ProShares UltraShort Silver (NYSE: ZSL) which aims to be double-short silver. There is always the chance of tracking errors here and it trades inversely with the price of silver. The shares are up 14% at $22.22 today versus $13.64 as a closing price last Friday. Being double-short silver in this vehicle just generated gains of about 63% in just four trading sessions.

Miners have also been hit but they are actually holding up better than the metal itself. The stocks didn’t get as much of a boost at the last surge in price, so they are not getting killed as the bubble deflates. Silver Wheaton Corp. (NYSE: SLW) is down 3% at $36.04 today and has lost almost one-quarter of its value from the peak. Shares closed at $40.62 last Friday and that is a loss of about 11% so far this week. Pan American Silver Corp. (NASDAQ: PAAS) is down 1.6% today at $33.96. Shares are down about 21% from its peak but down only about 6% from last Friday’s closing price of $36.12.

You can join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Filed under: Commodities, ETF, Metals, Mutual Funds, Trading Alert Tagged: PAAS, PSLV, SIVR, SLV, SLW, ZSL

Revenge of the Cult Stocks (SIRI, MCP, REE, AVL, LVLT, SLV, ZSL, YRCW, BIDU, LOCM, REDF, SIFY)

Administrator — Tue, 03 May 2011 18:14:24 +0000

There is a common belief of the skeptics that the market is designed to cause the most financial pain possible, and the moves in cult stocks can be more painful than most investors can withstand. There have been some very surprising moves in the world of cult stocks today. The most surprising move today has been seen in SIRIUS XM Radio Inc. (NASDAQ: SIRI), which feels like true revenge after having grown cautious at $2.00. The rare earth bubble continues with big surprising moves in the cult stocks of Molycorp, Inc. (NYSE: MCP), Rare Element Resources Ltd. (AMEX: REE), and Avalon Rare Metals Inc. (AMEX: AVL). Level 3 Communications, Inc. (NASDAQ: LVLT) is another surprising move. Silver is living up to the Devil’s Metal all over again as silver via iShares Silver Trust (NYSE: SLV) and the inverse by the ProShares UltraShort Silver (NYSE: ZSL) is making and breaking some speculators.

YRC Worldwide, Inc. (NASDAQ: YRCW) is living up to a death sentence and Baidu Inc. (NASDAQ: BIDU) is showing how fast the Chindia growth trade can die. Lastly, we are seeing these death trades in Groupon-like shares of Local.com Corporation (NASDAQ: LOCM), Rediff.com India Limited (NASDAQ: REDF), and in Sify Technologies Limited (NASDAQ: SIFY).

SIRUS XM Radio Inc. (NASDAQ: SIRI) is now up 8% at $2.075 today and shares hit a new 52-week high of $2.09. We have even seen about 175 million shares trade with more than two and a half hours until the close. We noted some slowing growth headwinds, but Gabelli maintaining its BUY stance may be the culprit for today’s rally. We had been very bullish after this one was battered into a penny stock and then we remained bullish as the fundamentals got better and better. Our view changed, however, as the stock approached $2.00 and frankly, today’s move seems baffling. We have said a new breed of shareholders would be needed to run this higher, and it seems that is what is happening despite caution from us and others about its value.

The ‘rare-earths’ is another sector we have been watching in bubble-land. That call was holding true as the stocks started petering out in mid-March. As we cautioned, no one knows how much bubbles can inflate… Now we have Molycorp, Inc. (NYSE: MCP) up yet another 8.4% at $77.59. We heard that Dahlman Rose gave a BUY rating with a $125 target. Rare Element Resources Ltd. (AMEX: REE) is up 1.2% at $14.02 and Avalon Rare Metals Inc. (AMEX: AVL) is up 2.8% at $9.08, and both of these rare-earth outfits were started with BUY ratings at Dahlman Rose. Be advised, some extra volatility may be coming Wednesday as CNBC is going to highlight the best companies in the rare-earth sector.

Level 3 Communications, Inc. (NASDAQ: LVLT) is one that seems like a sleeper considering that its revenue rose and that its loss was narrower than expected. This has a whole new host of shareholders to accommodate now that it is acquiring Global Crossing Ltd. (NASDAQ: GLBC). Level 3 shares were at $1.44 before the deal was announced, then they jumped to $1.70. The high print was $1.84 and the high close since has been $1.73. Shares today are up about 1.2% at $1.66 and volume is 27 million shares.

The Devil’s Metal is living up to its name… iShares Silver Trust (NYSE: SLV) was not supposed to be a cult stock but the speculative trading volume has been so massive in this ETF that it has become the biggest trading vehicle on Wall Street. The Silver ETF is down by another 4.6% at $40.86 after the margin requirements have been changed. This was above $48 just late last week. To show how shocking the move has been, the ProShares UltraShort Silver (NYSE: ZSL) is up 9.2% at $17.38 versus $13.64 just on Friday.

YRC Worldwide, Inc. (NASDAQ: YRCW) continues to be the re-implosion, all over again. This is on continued news that the restructuring is only going to leave common holders with about 2.5% of the company after the company restructures with creditors, the Teamsters, and debtholders this summer. But wait, there’s more… YRC also noted further dilution is possible. Shares are down over 13% at $1.31 and the trading pattern went as follows: $2.06 on Thursday, $1.98 on Friday, and then $1.51 on Monday… to the $1.31 today.

Baidu, Inc. (NASDAQ: BIDU) is taking it on the chin from “The Chindia Slowdown” trade. This ADR is down almost 5% at $140.26 after having just hit a high of $156.04 on last Thursday. There are two “Groupon Alternatives getting whacked today. Local.com Corporation (NASDAQ: LOCM) is down 16% at $3.74 on more than 2.7 million shares (about 4-times normal volume) after earnings were treated as a disappointment. Rediff.com India Limited (NASDAQ: REDF) is another one touted as the ‘Groupon of India.’ It is getting crushed after Sify Technologies Limited (NASDAQ: SIFY) earnings have SIFY shares down 14% at $5.82. Rediff shares are down 10% at $12.79 on about 2.2 million shares. Rediff was almost challenging $18 just a week ago.

JON C. OGG

Filed under: Cult Stock, Trading Alert Tagged: AVL, BIDU, LOCM, LVLT, MCP, REDF, REE, SIFY, SIRI, SLV, YRCW, ZSL

Commodities Watch: Aluminum Prices Reach 3-Year High; Silver Still Sliding; Not Much US Corn in the Ground Yet; USDA Lifts Cotton Import Quota (CORN, DBA, BAL, AA, RIO, SLV, ZSL)

Administrator — Tue, 03 May 2011 17:04:39 +0000

Today’s commodities news starts off with new highs for aluminum, and still falling silver prices, low numbers on corn plantings, and lowering of the outlook for cotton.

As prices for some commodities have weakened, aluminum prices have remained relatively strong. Partly this is due to manufacturing constraints in China, where aluminum’s heavy demand for electricity has forced the government to idle some of the country’s plants to maintain power supplies to the general population.

Supply has been forecast by HSBC to rise 8% in 2011 and demand is forecast to rise 9%, with prices rising gradually throughout 2011 to $2,535/metric ton ($1.15/pound). Prices are projected to continue climbing, to $2,600/metric ton ($1.18/pound) in 2012, and to $2,645/metric ton ($1.20/pound) in 2013. Aluminum on the LME today closed at $2,798/metric ton, as demand from South America has increased.

The most significant risk to these prices is a sudden change in smelting capacity. China’s restrictions on electricity have slowed the country’s smelter-building, but once the juice came back on in the first two months of 2011, China’s smelters were running at an annualized rate of up to 17 million tons.

In the US, Alcoa Inc. (NYSE: AA) has performed well in the past several quarters and there are rumors that Rio Tinto plc (NYSE: RIO) is putting together financing for an offer for Alcoa in the neighborhood of $25 billion. Alcoa shares are up around 3% today, to $17.68, near the top of the 52-week range of $9.81-$18.47. Rio Tinto shares are down about -2%, to $70.93, within a 52-week range of $39.30-$76.67.

Finally, a look at the second straight day of falling silver prices. The gray metal is selling down more than -5% today, at around $43.50, following yet another margin increase on the CME. The third increase in little more than a week has raised the margin requirement to $16,200/contract of 5,000 ounces.

It might be working. The iShares Silver Trust (NYSE: SLV)is down about -1%, to $42.40, after falling as low as $42.02 earlier today. The 52-week range of the shares is $16.73-$48.35. The opposite side is doing a bit better. The ProShares UltraShort Silver Fund (NYSE: ZSL) is up nearly 2.5%, to $16.29, in a 52-week range of $12.83-$164.80.

US farmers have planted just 13% of their expected corn acreage so far this year, far below the 40% average and last year’s 66% by the first of May. Cold weather and heavy rains have stalled planting in Illinois, Indiana, and Ohio. Ohio farmers have planted just 1% of their corn acreage this year, down from 61% a year ago.

Corn futures have been drifting downward too, although they have picked up a little today, posting a price of about $7.37/bushel at around noon. If US planting continues to suffer weather delays beyond mid-May, the outlook for the US corn crop could send prices back to near $8/bushel or even higher. The Teucrium Corn Fund (NYSE: CORN) is up about 0.5% today, at $45.51 in a 52-week range of $23.79-$48.77. The PowerShares DB Agriculture Fund (NYSE: DBA) is off fractionally.

The US Department of Agriculture has announced a limited global market quota for upland cotton that will allow an additional 104 million pounds of cotton imports into the US. The quota is effective for 90 days.

The quota results from the high price of cotton in the month of April. Whenever the average monthly price of upland cotton exceeds 130% of its average price for the past 36 months, an import quota may be established that is equal to 21 days of domestic mill consumption. In April, the price of upland cotton of a certain grade was 243% of the 36-month average.

The odd thing about this, though, is that cotton prices are falling again. Lower demand, mostly due to higher prices, have led the International Cotton Advisory Committee to forecast a significant decline in the 2011-2012 crop year, although the Committee expects prices to remain above the 10-year average of $0.60/pound. Just last month the Committee projected an average price of $1.38/pound. Cotton posted a record price in March of $2.27/pound. Cotton is trading today at about $1.56/pound, up slightly more than 1% from yesterday. The iPath DJ-UBS Cotton Total Return Sub-Index ETN (NYSE: BAL) is up more than 2% today, to $87.30, within a 52-week range of $35.64-$117.33.

Paul Ausick

Filed under: Commodities, ETF, Metals Tagged: AA, BAL, CORN, DBA, RIO, SLV, ZSL

iShares Silver ETF Gets Another Competitor (SLV, SIVR, DBS, USV, AGQ, ZSL)

247wallst — Fri, 24 Jul 2009 15:25:32 +0000

In the world of metals and commodity ETF products, the iShares Silver Trust (NYS: SLV) has been the go-to ETF for traders wanting exposure to the price of silver as it has an objective to reflect the price of silver owned by the iShares Silver Trust after the fund’s expenses and liabilities. There are other silver ETF products that traders and investors can use, but a new competing ETF has launched today. The ETFS Silver Trust (NYSE: SIVR) has now launched and has issued shares backed by physical silver SIVR for NYSE listing.

There is a fairly high benchmark here and it will be some time before traders and investors can determine whether this is a success or not. That measure will come through volume and liquidity. The iShares Silver Trust (NYS: SLV) trades on average 8.8 million shares. At $13.57, its 52-week trading range is $8.45 to $17.68 and its market cap is $3.9 billion.

PowerShares DB Silver (NYSE: DBS) is far smaller and far thinner in trading volume. At $24.67, its 52-week range is $14.81 to $33.00 and market cap is listed as almost $83 million. This one only trades almost 100,000 shares on an average day. There is also the E-TRACS UBS Bloomberg CMCI Silver ETN (NYSE: USV), although this one is so small and thinly traded that we do not even rank it very high.

Then there is leveraged-ETF trend seen in the the Ultra Silver ProShares (NYSE: AGQ), which is double-leverage against silver bullion. At $41.22, its 52-week trading range is $21.60 to $57.32 and its average volume is roughly 250,000 shares. Its double-short inverse is the ProShares UltraShort Silver ETF (NYSE: ZSL).

Despite the “four letter ticker” that might make you think this is a NASDAQ traded instrument, it trades on the NYSE.

JON C. OGG
JULY 24, 2009

Posted in Commodities, ETF, Metals Tagged: AGQ, DBS, SIVR, SLV, USV, ZSL