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« Kinross Gold Corporation: Call Options Update 09 Oct 08 | Main | Bernanke is turning Japanese! »
Thursday
Oct092008

Agnico-Eagle Mines Call Options Up 89% in 2 Days!

AEM Call Optins Chart 09oct08

Another calamitous day for the markets as equities were dumped on a global basis, excluding precious metals stocks, which bounced back in impressive fashion. Agnico-Eagle led the charge with a gain of 12.97% pushing our Call Options to $8.10 by the close, for a gain of 89% since our purchase two days ago.

We purchased the JAN09 Call Options at a strike price of $55.00 for $4.28 per contract just two days earlier so we are really pleased to see them put in such a terrific performance.

Having been dumped earlier in the week with equities in general, it was reassuring to see them follow gold’s lead with the Gold Bugs Index (HUI) putting on 47 points.

Gold has since dropped back and as we write it is trading at $889.70 on the Hong Kong Exchange. There may well be some easing of prices in the gold producing sector tomorrow if gold trades at lower levels. However, in such a nervous market a rumour of two could cause gold prices spike taking the gold stocks to higher ground and our sell order placed at $8.50 could be triggered.

Got any comments? Then fire them in!

Agnico-Eagle Mines Limited trades on the NYSE under the ticker symbol of AEM and on the Toronto Stock Exchange under the symbol of AEM.TO.

Trading decisions belong entirely to you as your circumstances are different from ours and we trade to suit our investment criteria and cash position.

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Reader Comments (8)

AEM is a great choice. I also added some AEM call spreads. Let's see how today plays out.

October 9, 2008 | Unregistered CommenterBC

Great call (if you will pardon the pun) and your announcement was made just the one day that I didn't get to my email. So be it, and maybe I can jump in now if there is a brief sell off.

Tell me one thing, why do you go so far out instead of like just 2 months for a lower cost? Do you feel that gold miners will take that long to advance?
John

October 9, 2008 | Unregistered CommenterJohn Ell

John, We prefer the security of a little more time for the trade to work out.

October 9, 2008 | Unregistered CommenterGold Prices

Have no more cash to buy anything. Still hoping Yamana comes back before Jan. I do have lots of those those calls. Along with KGC which is at a break even because I bought more at 70 cents...But good for you with Aem....I

October 9, 2008 | Unregistered CommenterGAry

I missed the call of AEM at the price of $4.28 and today is $6.70. My question is: should I buy it at this price? Please advise. Urgent!

October 9, 2008 | Unregistered CommenterEmtea

Emtea, It is not realistic to expect the newsletter authors to advise as to your personal position. Such advise would need to take into account items specific to you. Look at the newsletter where its strong point are.

They do a very good job (not perfect but very good) with their analysis of gold, the gold market and gold stocks.

The also go a good job with their analysis of the ups and downs of the market.

The newsletter is better used as a text book than a cook book. Understand the point they are trying to make (and see if they apply to you). If you just follow it blindly, you may be disappointed if it is not an exact fit for you.

October 10, 2008 | Unregistered CommenterBC

The AEM options you purchased at $4.28 are now sitting at $2 on 10/16. You should be OK with the Jan09 expiration date even though you could have spent half the money for the same calls today. I think AEM may even drop to around $30 before the FED meets at the end of the month. GLTA!

October 16, 2008 | Unregistered CommenterNorman

An update for all,

We are happy to hold this posistion for the time being and we still believe it will be profitable before expiration.

Thanks for all the great comments!

October 17, 2008 | Unregistered CommenterGold Prices

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