Silvercorp Metals, Inc. (SVM) - Aggressive Growth Profile

If you buy a put, you are essentially betting that the price will drop.  If you decide to exercise the option on a $10 strike for a stock trading at $8, the counter party has to buy that stock from you at $10 and if you didn't actually hold the underlying stock you'd be left with an open short position.  But it may not be worth it if you paid $3 in premium for the put.

Flip that around and say you wouldn't mind owning SVM at $10 but it is currently trading at $9. you could sell an in the money put and pocket the premium (which would most likely be more than $1 due to intrinsic value plus time value).  If you were assigned the option, your actual cost to buy the stock would most likely be less than the stock is trading for after you take into account the premium you pocketed for selling the put.  Let me know if that's not clear - explaining options can get a bit wordy.

So I guess back to my original question - and Sterling's question as well about 2013 SVM calls.  I think the bid / ask spread is high... (@GoodDoctor, as far as I know, the bid/ask spread is just like for stocks or currencies, just usually a lot wider due to volatility and lack of liquidity)

If you take the "best deal" in terms of bid/ask spreads in the table I posted, you get the $10 strike call with a $0.20 bid/ask spread, which is 8.9% of the price of the $2.25 contract.  It seems like going against the grain doesn't it?  I know many believe this stock is destined to go a lot higher, but wouldn't finding a different, more liquid options play in the silver space be a better choice?  Thoughts?

And in terms of miners, the only options play with liquidity is silver wheaton - jmo, then again, since I don't trade options, I don't follow the price of options at all.

You are an arrogant fool that knows nothing about me. 

I have been following this thread because I don't currently own a position in SVM but am very interested in establishing one. I am thinking of buying a few call options and a few shares. I am NOBODY"S expert on options. Have only dabbled in them. My first buys were for SLV calls back in April. I more than tripled my money only to lose 90% of it in May. I held too long. Actually, I sold and bought more rinsing & repeating for good profits and then let everything ride to my detriment over that fateful May Day Massacre.

Anyway.. the point is ...I am determined to play again to make back the money I lost plus some. Smarter this time I hope. I am thinking of Jan12 NTM calls in SVM (and a few other miners). I of course would love to buy 'near the bottom' but who knows where that is. I think on one hand this would be a good place to buy both SVM calls and shares. However, I also think that TPTB may let our larger markets fall in order to usher in the next round of QE. If that happens I can envision mining shares going down substantially again before a huge upswing. Even if that happens, I still believe the upswing would/could happen in metals and miners before the onset of the new year but that's only my guess. In that event buying calls now in the miners would have time to recover by the first of the year even if you rode out a downturn in the larger markets. But, of course if you knew that the downturn was going to occur you would prefer to buy your shares and calls then at the equities downturn and not now ..to avoid the panic of having to ride anything out to get back. On the other hand a huge upswing in miners and metals could happen at any time and you may miss the upswing if you wait on a larger market dip to buy your calls & miners. What to do.

Thank you for the excellent discussion on this company. I like what I see. I might point out though that in the SeekingAlpha  article where the sp was given a target of $66-$77 ...someone in the comments section asked the author to back up that assertion and he (the author) responded that he had gotten his numbers wrong due to working late. Here is his response in the comments:

"Please excuse me Gang just a typo... working late last nite and missed it. I show $SVM has a median price target of $15 by 3 brokers and a high target of $16.80 according to Yahoo Finance. Thank for catching that! Take care DAC"

Wow. That's quite some mistake.  Anyway.. I still very much want to be in on this one. Thanks all!

my GoodDoctor friend.. ................I think I am in denial about *now* being the time to buy. ....I can't actually get my hands on my fiat for this buy for about two more weeks.

Darn. Drats. Darn. ........Won't you please make them wait for me??  lol.

I do fear you are right. ....I will see how it goes and try to buy on any dips if SVM takes off without me.

It wasn't an emotional response, it was a fact. You are an arrogant fool and for some reason you are very sensitive of any criticism of SVM. 

Are you just stupid or are you just confused? Not only did I not advocate anything positive about the US government, I didn't even make a single statement about them. 

I'm very curious why you are so defensive and feel the need to attack me when I simply stated my personal concerns and why I am not fully invested in SVM. Do you have some hidden interest in this company? 

SVM off to the races this morning on the release of the Resources Estimate. I set my stop a little too low over the last two weeks and never got in at the low I wanted to.. and now it looks like I should have just gone for 9. I will wait patiently and hope we see it dip again. Looks like 9 is the new base.

I was not proposing any conspiracy theories because I don't like them and once again you are wrong ─ I am far from being a nationalist. If you weren't such an arrogant jerk you could clearly see I never advocated any conspiracy theories nor did I mention anything about trusting the U.S. Government or nationalism.

I don't have any conspiracy theories to support and I have no need to prove my personal opinions. As I stated earlier I like SVM, I am invested in SVM, but I am not yet ready to fully inveset in them. Why is this such a problem for you?

I don't have any opinions whether the conspiracy theories are true just as I don't have any about manipulation of the silver market. I make my decisions based off the fundamentals instead of the theories of others, but I would be a fool to completely ignore them because the theories, even if completely false, are still powerful at keeping investors away. If you knew anything about investing you would know how important investor confidence is.

Ok dudes. Let's hug and make up now. Nice move in SVM lately.

Got Turd telling me to take profits in his daily blog post.

Went long on SVM @ 8.89/share, up ~19% as of right now.

Do I take the money and run?  Lots of great fundamental news out of SVM this week.  Tempted to hold, against Turd's warning.  Or is he warning against the options plays directly on the metals?  I.e. futures?