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iShares Silver Trust SLV JUNE 22nd expiration $28 CALLS EASY  MONEY HERE FOR .06 x.07 now; Gonna be .25-.50+ (300-500% Gains) in less then 2 weeks

iShares Silver Trust ( SLV ) fell by 14.5%. On the other hand, the stock market continued to rally as the S&P 500 index increased by 1.8% during last month. So what is next for silver ?

The last two years have given silver investors an excellent chance to accumulate a long-term position as we've pulled back steadily since April 2011. As the price has come down I have been recommending for some time to dollar cost average and/or pyramid down into silver and silver equities. So what is the path to a surge in silver prices? My primary thesis, much of which is laid out in the background section  here , is that the endless easy money policies from central banks around the globe have created a long-term tailwind for the various precious metals. Despite the short-term pressure on the metals, the Federal Reserve's continued accommodative and dovish policies should create a weaker dollar in the long run, inflation and in turn, bolster the prices of gold and silver. Yesterday (May 1), the  FOMC statement released indicated the pedal is still to the metal. The Fed left the federal funds target rate between 0% and 0.25% and also maintained the $85 billion-per-month purchases of Treasury and mortgage-backed securities policy in place. I maintain that for the long-term, these policies will be detrimental to the value of the dollar and over time gold and silver will continue to rise. The second key driver that I believe could cause a surge in silver in the next few years off the recent lows is the multiple sources of demand for the metal, in particular technology.

Multiple Sources of Demand for Silver ( SLV )

This year we have seen  a shortage of both American Silver Eagles from the US Mint as well as junk silver available (that is, pre-1965 US dimes, quarters and half dollars). Further, silver ETFs ( SLV ), including some that will be mentioned in this article, have continued buying silver coins and bullion at a record pace. Thus, demand for the metal is there, and has helped keep silver above the $22.00 mark. This mark serves as an important technical resistance point. It has bounced off this level twice since the major selloff two weeks ago. Aside from silver being a precious metal, it also has many industrial and technological applications. Therefore, there will always be some level of demand, but such demand should pick up significantly when the global economy comes fully out of recession.

Despite the stock markets in the U.S. setting all time highs, the broader economy is still just limping along. The most recent  Q1 GDP number showed expansion of 2.5% but was far below consensus estimates of 3%. Further, the jobs picture has yet to improve markedly, though unemployment has come down, albeit slowly. This slow growth has led to industrial demand for silver ( SLV ), but the growth is slow enough to keep the Fed on the easing accelerator which bolsters the precious metal side of the metal.

When the economy rebounds, there will be a spike in demand in many areas. The demand will not be just in coin and bullion form, but also in jewelry, silverware and dentistry. On the technology front, silver is one of the most conductive metals out there, and thus is utilized in photography, electronic devices, optics, medical devices/tools and most recently, in nanotechnology. One lesser known growth area for silver use is in technology, and that is where a lot of demand will be generated as we further delve into an era dominated by Apple ( AAPL ) iPhones, iPads etc. and its competitors' similar products. Apple with its millions of iPhones sold has created massive industrial demand for silver. As its sales are strong this demand will continue. In fact, there is an average  20 cents of silver ( SLV ) now used in each cell phone. While that is not much for a single phone, considering there were  nearly six billion mobile subscribers worldwide in 2011-2012, a number that's growing here in 2013, it becomes clear that new phones will always be in demand. Using the average of 20 cents a phone, we generate demand for over $1 billion worth of silver in just new mobile devices alone. There is a lot of silver in old cell phones, photography chemicals or medical devices that already have been taken out of the market. Although there is a push to recycle electronics and reclaim costly elements like silver within them, in situations where silver is used in very small portions (such as new smartphones), it is not cost-effective or even practical to recover the silver. Thus, new silver will be utilized in these devices.

Gold-to-Silver Price Ratio ( SLV )

At the time of this writing,  silver ( SLV ) is priced around $23.30 an ounce, approximately 60% off its all-time highs set in April of 2011. Gold is currently priced at about $1,450 an ounce. That represents a 61 to 1 gold-to-silver price ratio, whereas the historical ratio is 16 to 1. The respective prices of gold and silver have not approached this historical ratio in many years, and I believe a reversion is long overdue.

To achieve this reversion, gold would have to fall over $1,000 an ounce or silver will have to rise at a greater rate than gold in value in the coming years. I believe the latter is far more likely than the former, especially in a climate of endless monetary easing. Combine this with the rising demand in the technology sector and the fact that industrial demand will return in full force once we have moved completely out of the recession and we have a strong case for an investment in silver. The ratio has crept up year to date, but it has generally been in the 50-54 range for some time.

Three Main Ways To Invest in Silver ( SLV )

There are three ways investors can get exposure to silver. My top approach for silver exposure is purchasing physical silver bullion and coins, followed by purchasing shares of ETFs ( SLV ) that track silver prices, and finally through the stock of the individual silver companies/miners.

Physical Assets ( SLV )

I firmly believe the best way to invest in silver is through physical bullion or coins. There are dealers in most cities and merchants on the Internet where you can buy silver bullion bars and/or coins. I not only consider physical silver as a wise investment given government stimulus, but I also consider it to be a form of insurance in case of a total breakdown of the fiat currencies and modern financial systems we have in the world today. If you decide to invest in physical silver assets, do so by only buying from a reputable dealer. The only downside from Internet purchases is high shipping and insurance costs as well as the possibility of a required minimum purchase. Whenever possible, buy locally to avoid such excessive shipping and handling fees.

Silver ETFs (  SLV ) Track Physical Prices

The iShares Silver Trust ( SLV ): This is a popular investment that  seeks "to reflect the price of silver owned by the Trust, less the Trust's expenses and liabilities. The fund is intended to constitute a simple and cost-effective means of making an investment similar to an investment in silver." Although the fund is not the exact equivalent of an investment in silver, they provide investors with an alternative that allows a level of participation in the silver market through the securities market. The fund has $8.9 billion in assets with an annual expense ratio of approximately 0.5%. One important thing to note with the SLV is that iShares recently announced an increase in fees. This increase makes SLV slightly less attractive than it once was. Although SLV tracks the price of silver, if silver were to remain stagnant for all of 2013, say at $24 an ounce, then SLV would lose value given the fees and expenses. Overall, it does a good job of tracking silver price moves in general, but this caveat is important to consider for a long-term investment. Shares in SLV currently trade at $22.86 on average volume of 11.4 million shares and have a 52-week range of $21.96-$34.08.

Sprott Physical Silver Trust ( PSLV ): The PSLV is an ETF ( SLV ) that is backed entirely by physical silver bullion. The fund's goal is to provide a secure, convenient and exchange-traded investment alternative for investors who want to hold physical bullion. The Trust offers a number of compelling advantages over traditional exchange-traded bullion funds, including bullion storage in Canada, which is not held with a bank-owned custodian. Further, the fund  allows investors to redeem units of the ETF for delivery of an equivalent amount of physical bullion. In this regard, the fund is unique relative to SLV and SIVR. Currently PSLV trades at $9.33 a share on average daily volume of 1,200,000. The 52-week range of PSLV is $8.93 to $14.47.

ProShares Ultra Silver ( AGQ ): This ETF applies a 2X exposure leverage to silver using forward contracts and futures. The investment  seeks "to provide daily investment results (before fees and expenses) that correspond to twice the daily performance of silver bullion as measured by the U.S. dollar fixing price for delivery in London. The fund invests in any one of or combinations of financial instruments (swap agreements, futures contracts, forward contracts and option contracts)." This is a play for short-term appreciation in silver prices. Like other daily funds of its nature, it should not be held for periods longer than a month in general. AGQ currently trades at $25.33 on average volume of 1.6 million. AGQ has a 52-week trading range of $23.53-$60.63.

Silver Companies ( SLV )

Finally there are the silver companies/miners to consider for exposure to silver. There are plenty of individual companies that I really like. See  my other articles for which are my favorites and why.

My favorite individual company is Silver Wheaton ( SLW ). SLW is a worldwide silver streaming company. Streaming is a very unique and long-term solvent business approach in the gold and silver space. The company offers a superior alternative to traditional precious metal mining stocks because in general the approach SLW takes offers a stronger opportunity for revenue growth with lower long-term overhead than mining companies, many of which are in unstable jurisdictions. Rather than mine for metals directly, SLW generates its profits by providing upfront financing for other companies in the mining space looking to expand and drill for precious metals. In exchange for the up-front financing of these companies, SLW acquires the right to purchase a portion of production generated from the mines at a fixed cost. SLW has contracts with companies around the world to purchase silver production in bulk at prices well below market value. Once SLW acquires the silver at the predetermined upfront investment cost, it then proceeds to sell the silver at higher prices.

At the time of this writing, SLW currently trades at $24.21 and has a 52-week trading range of $21.79 to $41.30. The stock is down over 30% since the start of the year and represents a good opportunity to initiate or add to a position. On average, about 5.1 million shares exchange hands daily, and most trading session volume has been around this number. The company trades at a 14.7 P/E multiple but only a 0.68 PEG ratio and currently yields 2.4%. SLW's earnings per share are estimated to grow at a rate of 36% in the next five years, though recent lower silver prices have been a short-term impediment to revenues. The company also has a strong  balance sheet with a debt-to-equity ratio that is decreasing. SLW  also has more proven and probable reserves of silver in its portfolio than other major silver companies as discussed  in this recent piece .

Conclusion ( SLV )

I maintain that long-term precious metals stand to gain significantly from balance sheet expansion at central banks and currency debasement. Gold is an excellent play off of the stimulus coming from governments worldwide, but I believe silver and silver companies may outperform gold in the next few years. With the Federal Reserve once again reiterating that they will maintain their accommodative stance the long-term tailwinds are in place for the precious metals, despite recent price action and technical selling. However, silver is not only a precious metal currency, but also has massive industrial and technological demand, particularly in the technology sector. Smart phones alone generate billions of dollars in silver demand, much of coming from tech giant AAPL. This article presents some bullish evidence to argue in favor of silver and I believe each approach outlined can be profitable on the rebound. Physical is my preferred way to go but the ETFs mentioned in this article are not exhaustive. Further, money can be made with them. At current levels, I believe silver and silver companies are significant opportunity buys, especially for the long-term investor.

iShares Silver Trust SLV

Inception date: 4/21/2006

The iShares Silver Trust is not a standard ETF ( SLV ). The Trust is not an investment company registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act. Shares of the Trust are not subject to the same regulatory requirements as mutual funds. Before making an investment decision, you should carefully consider the risk factors and other information included in the prospectus. (  SLV )

POTENTIAL USE

Access silver

EXPOSURE

The Trust holds silver bullion and is designed to provide investors with a simple and cost-effective method to gain exposure to the price of silver.

TRUST NAME

iShares Silver Trust

Avg. Annualized Total Returns (NAV) qtr. as of 3/31/2013

View all performance ( SLV )

1 Year3 Years5 Years10 YearsSince InceptionSLV-12.13%17.26%9.20% --12.54%Benchmark * Benchmark London Silver Fix Price-11.69%17.85%9.75%20.44% 13.10%

* Source: Bloomberg. The iShares Silver Trust's silver and other assets are valued on the basis of each day's announced London Silver Fix, the price for an ounce of silver set by three market making members of the London Bullion Market Association, minus all accrued fees, expenses and liabilities.

Fundamentals as of 4/30/2013

LabelValueBeta Beta (vs S&P 500) Beta measures the risk of the fund compared to market benchmark. Statistically, it is the covariance of the fund and benchmark, divided by the variance of the benchmark.vs S&P 500--Standard Deviation (3 year) Standard Deviation The Standard Deviation is the statistical measure of the degree to which an individual value in a probability distribution tends to vary from the mean of the distribution. It is widely applied in modern portfolio theory, where the past performance of securities is used to determine the range of possible future performance, and a probability is attached to each performance.--

Premium/Discount as of 5/3/2013 ( SLV )

DescriptionValuePremium/ Discount Premium/Discount The Premium/Discount table presents information about the difference between the daily market price for shares of the iShares Silver Trust and the iShares Silver Trust's net asset value. The market price is determined using the midpoint between the highest bid and the lowest offer on the listing exchange, as of the time that the iShares Silver Trust's NAV is calculated (usually 4:00 pm Eastern time). The table above shows the premium or discount expressed as a percentage of NAV. Although market makers will generally take advantage of differences between the NAV and the trading price of Trust shares through arbitrage opportunities, there is no guarantee that they will do so. There is no guarantee an active trading market will develop for the shares, which may result in losses on your investment at the time of disposition of your shares.
Click here for important information about Premium/Discount -0.56%NAV NAV N AV is the price per share at which the Trust issues and redeems shares, calculated by the Trust accountants.
Click here for information on how NAV is determined $23.42Mid-Point Mid-Point The Bid/Ask Mid-point (Market Price) is the midpoint between the highest and the lowest offer on the listing exchange, as of the time that the Trust's NAV is calculated (usually 4:00pm Eastern time)$23.290Closing Price Closing Price The Closing Price is the price of the last reported trade on any major market.$23.29

Profile as of 5/3/2013 ( SLV )

DescriptionValueTotal Net Assets$8,132,559,792Shares Outstanding347,250,000Sponsor' s Fee0.50%Inception Date4/21/2006Ounces of Silver in Trust335,376,960.800Tonnes of Silver in Trust Tonnes of Silver in Trust One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.10,431.39Indicative Basket Silver Amount48,286.500Basket Silver Amount48,288.500NAV per SLV in Silver NAV per SLV in Silver Current basket of silver in ounces as a percentage of inception basket size of 50,000 ounces.96.573%BenchmarkLondon Silver Fix PriceIndex TickerSLVRLN<index>

Net Asset Value

as of 5/3/2013

$23.42

• $0.54


• 2.36%

Price

as of 5/3/2013

$23.29

• $0.27


• 1.17%

• Quotes & Charts


• Premium/Discount

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. This information must be accompanied by standardized returns. For standardized returns and performance data current to the most recent month end, click the "Performance" tab above. ( SLV )

Silver Spot Price

Source: TheBullionDesk.com
Time stamp is GMT (Greenwich Mean Time). Click here for Important Disclosure.

Trading Information ( SLV )

Identifier TypeSymbolTicker Ticker The Exchange Trading Symbol is used to find the price at which the Trust last traded on the stock exchange it is listed on. Shares of the Trust trade on the NYSE Arca Exchange.SLVIndex TickerSLVRLN<index>NAVSLV. NVUnderlying Trading ValueSLV.IVShares OutstandingSLV. SOCUSIP46428Q109 Options Available