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« A Monster day for Gold and Silver Stocks! | Main | US Rates: No change! »
Thursday
Jun262008

Kinross Gold Call Options Up 77.45% in Two Weeks!

Kinross Gold Chart 27 June 2008

Our Call options on Kinross Gold Corporation gained 45.45% today as the stock of the Kinross Gold Corporation rose 11.76% to close at $22.34.

As we can see for the above chart our signal to buy call options was fortuitous, as we appear to be right on the money when on the 13th June we made a purchase of the JAN09 Call Options with a strike price of $20.00, paying $2.68 for the contracts. As we write these contracts now stand at $4.80.

For those of you who utilise the charts for investment decision-making please notice that the MACD experienced what some analysts refer to as a golden crossover. This is when the black line crosses over the red line in an upward movement. None of these indictors work perfectly every time but on this occasion it has proved to be reliable.

We did try to purchase Call Options on Kinross Gold Corporation earlier on the 12th June 2008 when we reported the following:

Yesterday we saw the precious metals take a bit of a pounding resulting in some gold producing stocks dropping about 7%, such as Kinross Gold Corporation.

During the carnage we looked for a way to generate a profit from such a volatile day and we chose an options play on Kinross Gold.

For this trade we placed orders to purchase the Jan 09 Call options at both a $20.00 and $30.00 strike price, as they appeared to offer value to us. Unfortunately our orders where not filled, so we took aim, fired and missed!


Rather than chase the prices higher we decided to be patient and wait for the opportunity to come back into our price range and on the 13th June 2008 we were pleased to report the following:

Having missed out recently in our attempt to purchase call options on Kinross Gold Corporation we managed to bag a few today. We bought the JAN09 series at a strike price of $20.00 for an average of $2.68.

This trade will be funded from the ‘opportunity cash’ that forms part of our trading account. Kinross we believe is undervalued at the moment and as we can see from the chart the stock price is now below the 200dma and the technical indicators suggest that this stock is now oversold.

Our exit strategy is to hold these contracts until they have doubled in value which hopefully will arrive sooner rather than later. Tomorrow could well sell some profit taking in this sector so we need to brace ourselves for a slight retraction in prices.

To read about Kinross in more detail please see our latest review which was carried out on the 14th April 2008.

All of our research, analysis and trades are published on our web site together with our newsletter and alerts, which you can receive for FREE by simply clicking here.

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Reader Comments (4)

Re: Kinross stock (not option) - June 27 and July 2

It appears that there is a disconnect between the price of bullion and Kinross. The price of bullion around noon 7/2 (Eastern Time) is higher but Kinross dipped.

Gold stocks will reverse here and back into range trading?

Any comments?

July 2, 2008 | Unregistered CommenterSS

At times the HUI just does not follow the gold prices, so it remains to be seen if the stocks will take off and play catch up or gold comes back down again. The day to day aberrations are interesting but they really dont bother us as we are in a multiyear bull market and where gold goes so will the quality gold stocks go, eventually.

July 2, 2008 | Unregistered CommenterGold Prices

HEy,

My server was experiencing problems on my hotmail account the past week, and my emails were being kicked back. Please continue my my gold-silver- and Uranium emails, if i was kicked out of the system as a result of the problems. Thanks GAry

February 23, 2009 | Unregistered CommenterGAry

GAry,

We have checked at this end and you are still registered with us so you should be getting the letters as usual.

February 23, 2009 | Unregistered CommenterGold Prices

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