With silver (SLV) massive selloff the volatility is sky high, which gives us the opportunity to do long butterfly for May 2013 expiration.

Trade Entry on April 15th:

Purchase PUT SLV 22 May 2013 SLV1318Q22.5 contracts 6   1.27  (773.45) - long "head"
    Sale PUT SLV 21 May 2013 SLV1318Q21   contracts -6  0.71  414.54   - short "wings"
    Sale PUT SLV 21 May 2013 SLV1318Q21   contracts -6  0.71  414.54   - short "wings"	
Purchase PUT SLV 19 May 2013 SLV1318Q19   contracts 6   0.33  (209.45) - long "tail"	

Total debit : - 0.18 (or cost -$108)

Investment thesis is that it sells off about 5% from here or stabilizes, while the volatility collapses. We would only lose a small amount in either direction (up or down) if we are wrong, and have the opportunity to make money if SLV stays in the range of 23 to 20.5 near to May expiration. The advantage of a long butterfly placed for a small debit is that typically only that small debit is lost if we are “wrong” on direction.