Put Spread on SLCA on 10/22/2014

U.S. Silica Holdings, Inc. (SLCA) produces and sells commercial silica in the United States.

The company operates in two segments, Oil & Gas Proppants, and Industrial & Specialty Products. It offers whole grain commercial silica products as fracturing sand in connection with oil and natural gas recovery; and provides its products to the foundry and building products industries, as well as sells its whole grain silica products in various size distributions, grain shapes, and chemical purity levels for manufacturing glass products. 

The company's stock price moves in tandem with oil prices. To show the correlation, we have shown the Market Vectors Oil Services ETF (OIH) chart. OIH has rebounded from a recent low and it has come to a downward trendline. SLCA charts shows a "double top" formation around the $72 level while its price has rebounded from its recent lows to the near $50 level. Shares should see a pullback to around the low $40s. We intened to trade this expected decline.

52-Week Trading Range: $24.28 - $73.43

Last Trade: $49.80

Trade Buy 1 November $50.00 Put at $3.55 Sell 1 November $45.00 Put at $1.65 For a net debit of $1.90 Profit/Loss Analysis Breakeven at $48.10 Maximum profit is $310.00 at strike of $45.00 Maximum loss is ($190.00) at strike of $50.00 Closing Summary Sold 1 November $50.00 Put at $5.00 Bought 1 November $45.00 Put at $1.60

Position closed on 10/30/2014 at price of $3.40 with a 78.95% gain in 7 days.

Updates

10/30/2014 11:39:52 AM

We are taking profits on SLCA Put spread.

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