Kinross Gold Corporation: Call Options Update

The above chart shows the status and the progress of the January 2009 Call options that we purchased on 24 July 2008. We purchased these contracts, which consist of one hundred shares per contract for $2.50 per contract and they have suffered in recent carnage when gold was battered. However gold has made a recovery and is trading at $877.20 as we write. These options have started on the road to recovery as we can see from the chart. Options trading can be very volatile and we can be wiped out in a day when things go pear shaped but we can also generate a reasonable profit when we are on the right side of the trade as we were when we bought and sold these very same contracts recently.



Taking a quick peek at the chart for the stock price of Kinross we can see Kinross has bounced back from a low of around $12.00, we now need to see it make a push for the $20.00 level in order to bring the Call Options back into the money. We are comfortable with this position as we have until January 2009 for Kinross to make its run and we are quietly confident that the gold price will go a lot higher from here, dragging Kinross with it in the process. So all we can do now is leave it market to lift sufficiently for us to bag a profit. The sell order was placed at the time that we purchased the option so if there is a spike, even while we sleep, it should be exercised and our cash returned to the sidelines.

We are presently researching the options sector with the view to buying more Call Options shortly in order to take advantage of the year end rally that we believe will challenge and surpass the old highs made by both gold and silver so stay on your toes!

Just a reminder that this recent run in gold has already brought 100% gains on two of our option posistions. We sold our Gold ETF calls and our Agnico Eagle calls a week ago, making 100% profit in 44 days an 37 days repectively.

Have a good one.

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