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« The Carbon Cap: The Newest Form of Taxation | Main | Randgold Resources Limited Options Trade Exit Strategy »
Wednesday
Jul152009

Randgold Resources Limited Options Up 100% in one Month

Randgold chart 15 July 2009.JPG


Chart courtesy of Stockcharts

We are pleased to report that we have sold our PUT Contracts on Randgold Resources Limited for $10.00 on Monday 13th July 2009 generating a profit of 100% in one Month. We acquired these contracts on the 11th June 2009 when we purchased the September $65.00 PUT contracts, GUDUM in Randgold Resources Limited for $5.00 per contract in anticipation of a pullback.

The market has been good to us and we are pleased that our exit strategy worked out with our sell order being achieved freeing up our cash for other possible opportunities.

In our last article on Randgold we highlighted that the gap between the stock price and the 200dma was closing and that the technical indicators were suggesting that this stock was oversold. This situation prompted us to place a sell order which was hit early on Monday before Randgold's price started to rise again and the value of the PUTS started heading south. Yes, we were very fortunate to hit our target, but sometimes Lady Luck works in your favour.

In terms of lessons learned this trade produced a paper profit of around 40% the day after we had made the purchase and we should have closed then taking a quick profit and then waited and searched for the next entry point of which there were one or two. It is very important to maintain discipline in these situations so we have to admit that we were sloppy in not taking such a good profit over the very short time period of one day. For those of you who did follow us in on this trade and closed out earlier than us, then well done as you have preserved your capital and made a little more too.

Any thoughts or comments on how we could have done better then as always please let us know.

Have a sparkling day.

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Reader Comments (1)

Hello, I have just started to get involved in trading Covered Warrants in the UK. I would be very grateful if you could now point me in the direction of knowing where to find what warrants are available on the US/Canadian markets
in gold mining companies. You mention Randgold - are warrants available on the LSE?
Any info' on finding available warrants in gold companies would be much appreciated.
I believe you are British as you often mention the LSE and also write good English!!!

September 28, 2009 | Unregistered Commenterdave Read

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