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 Replies: 11 / Views: 1,685 |
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Pillar of the Community
United States
759 Posts |
Soliciting opinions on buying SLV after today's drop ($33.67 close) and a check of overnight markets. Would appreciate any opinions, although I'll ignore those that don't match mine after tonight's research. :) Thanks.
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Pillar of the Community
United States
4008 Posts |
My opinion is unchanged and does not depend on price. Just buy a little from time to time as you can and save it for that rainy day the politicians are working so hard to make happen. That's all. Dollar cost averaging at its best.  |
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Pillar of the Community
United States
802 Posts |
I own SLV. I actually am surprised it isn't rising. It is just manipulated by the government. They make new rules and laws, that is what caused the last significant drop from near $50. I would be surprised if SLV doesn't hit $50 this year.
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Pillar of the Community
United States
3540 Posts |
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Valued Member
United States
384 Posts |
 with the above recommendations. |
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Pillar of the Community
United States
860 Posts |
First on SLV, there are tax consequences, where you may face 28-35% tax unless you hold it in an IRA or a ROTH. This article spells it out. http://seekingalpha.com/article/546...odities-etfsAlso the government didn't change the rules or laws when silver was approaching $50, The CME changed the rules on margins, etc. The CME Group Inc. operates the CME, CBOT, NYMEX, and COMEX regulatory exchanges worldwide and they are a public traded company on NASDAQ. So anyone can own a piece of the regulatory company. If one can get an option account from their broker, they could buy calls for Jan 2012 expiration $34 level for $4.20 a share rather than $34 a share. Or the same option for 2013 expiration for $6.52. Of course if it doesn't get to the $34+ , you can lose all $420. But if you buy 100shares and it goes down to below $30, then you lose the same. Curiously, brokers do not report options buy/sell to the IRS nor does the IRS ask them to, due to their complexity as they do with shares. Not that I would think that anyone would not self report such gains or losses on their taxes. You would think that some one that is sure SLV is going to $50 by 2012 or even 2013 would buy options. Right now, the Jan 2012 $37 look interesting @ 2.94. So if silver is over $40 by next January, I break even. If not, I can lose all. Jim |
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Pillar of the Community
United States
4008 Posts |
Well, that's the thing about options. You can make or lose a lot of money quickly. Some investors will be long or short on a specific issue and will then buy some put or call options as a hedge. Personally, I never thought that my dorsal fin was big enough to swim in those waters... way too many Great Whites in there doing their thing full time.  |
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Pillar of the Community
United States
830 Posts |
So Desertgem, are you saying with options you don't have that higher capital gains rate?  I just started watching the "Options Action" show on CNBC (Fridays). I think I heard them say the other day something about collecting dividends if you happen to hit the ex-dividend date within your call or put holding period. That surprised me but I may have misunderstood because they talk so fast. Edited by GoThunder
06/15/2011 09:30 am
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Pillar of the Community
United States
860 Posts |
Gothunder, please check with your tax advisor, but this is the story I get. Since the SLV shares are of a trust that theoretically buys units of silver to back such, when you sell it , you are taxed at the "collectible" level of capital gains ( 28% I think). Options on SLV gives you only the right to buy or sell a share of SLV over the time you hold the option, so you do not actually own a share of SLV, you own the right for a period of time. Profits/losses from options would fall under the individual's rate of taxation for capital gain. Again, check with your advisor, but buying/selling SLV in IRAs or ROTHs are taxed as standard when withdrawn within the IRA/ROTH rules. So profits generated in a ROTH would be untaxed when withdrawn within rules. IMO.
I am not a tax advisor. :)
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Pillar of the Community
United States
830 Posts |
Yeah thanks, I've asked my tax adviser several times if the capital gains rate was higher with GLD and he has always said no...but like that link you posted, I've heard otherwise before. So he may be wrong. I bought GLD in my taxable account this year so I'm going to have to get that straight. I don't want to mess with the IRS. |
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Pillar of the Community
United States
860 Posts |
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Pillar of the Community
United States
830 Posts |
Yeah thanks, that spells it out pretty clear. So buying calls looks better from a tax stand point, I just wish they didn't expire or have a contango.  BTW did you notice page 14, that was interesting (world silver supply and demand 2001-2010) Edited by GoThunder
06/15/2011 3:47 pm
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Replies: 11 / Views: 1,685 |
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Posted 06/13/2011 5:15 pm
