Technically, long-term investment perspectives, the major trend of Silver is still on the verge of consolidation pattern as the bulls may extend up to 17.605 (see the rectangular area on the monthly charts).
From last more than 2 years or so, the prices of silver have been experiencing the resistance and supports at 17.993 and 13.606 between this range.
So we think it would be quite hasty decision to jump the guns and initiate bullish positions on long-term investment perspectives.
To conclude, the short and medium term trend seem bullish bias as the prices can take off swiftly if it breaches hurdles of 17.334 levels, while long-term investors may have to wait for a better clarity.
So, the risk averse traders are advised to add below options strategy to safeguard your FX portfolio.
Well, the strategy goes this way, when you’re holding the underlying spot FX outrights, simultaneously buying puts on a protective grounds and shorting call options against that holding.
Both puts and the calls are to be of OTM strikes having the similar tenors and must be equal in a number of contracts.
The collar strategy is the equivalent of an out of the money covered call strategy with the purchase of an additional protective put.
The collars is a good option combination to deploy if the options trader is writing covered calls to earn premiums but wish to protect himself from an unexpected sharp drop in the price of the underlying commodity.
The material has been provided by InstaForex Company – www.instaforex.com