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« Dear Comrades In Golden Arms, 03 March 2010 | Main | High River Gold Update 01 March 2010 »
Tuesday
Mar022010

Randgold Resources Limited Call Options Up 30%

Randgold Chart 03 March 2010.JPG

This is a quick update on the Call Options we purchased on the 9th February 2010 on Randgold Resources Limited (GOLD) the June 2010 series with a strike price of $75.00 (GUD Jun 19 ‘10 $75 Call) for which we paid $5.50 per contract for them. The session on NYSE has about 1.5 hours to go with the bid standing at $7.10 and the ask at $7.30 registering a gain of around 30%, as we write.

On the 5th February 2010 we wrote the following:

Randgold Resources Limited (GOLD) has been taking a battering lately along with most other gold producers which is interesting to us as we like this stock a lot but do not own any of it at the moment. The current correction could present us with the buying opportunity of the year so its now time to watch it carefully and be prepared to pounce.

As we can see from the above chart this correction could well bring Randgold back into the frame as a Buy having fallen 5.91% today alone and to close at $67.29. This is a fair way down from its recent high of almost $90.00 per share, a price that left us thinking that we might never own it again. Still never say never in this business, its so volatile and can change on a dime as we have said many times before.


As we write Randgold is trading at $76.09 having gained around 2.6% in todays trading.

We purchased the Call Options on 9th February when the stock was trading at $67.50, it is now above the strike price of $75.00 and in the money, so every dollar gained by Randgold should increase the value of the options contracts by the same amount. Four consecutive good days in a row might attract profit takers, however the RSI can still go higher, so we will stick with it for now.

Gold is currently up to around $1134.90/oz which is a terrific gain for the day especially to see it push up and break through the $1130/oz level which many regard as positive for the worlds only real money.

Randgold has been kind to us in the past and we have waited patiently for this opportunity to present itself, so lets hope that this progress continues and we can bank a few bucks.





Randgold Resources Limited has a market capitalization of $6.68 billion, a 52 week trading range of $40.41 to $90.30, a P/E ratio of 91.83 with an average volume of 1.0 million shares traded.

Randgold Resources Limited trades on the NASDAQ under the symbol of GOLD and on the London Stock Exchange under the symbol of RRS.



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Reader Comments (6)

Congrats on getting in at the bottom for this trade.
Keep up the great work!

March 3, 2010 | Unregistered CommenterMark

Mark,

Thank you for your very kind words, now stay awake as we need to place a stop in order to lock in profits and protect our capital, will post soon.

March 3, 2010 | Unregistered CommenterGold Prices

LOL...am alive and very much awake!
Protecting capital is all important...everyday.

March 5, 2010 | Unregistered CommenterMark

Mark,

Have you placed a stop then?

March 5, 2010 | Unregistered CommenterGold Prices

Gold Price Guys,
I'm not in Rangold right now...just wanted to congratulate you on picking the bottom and a solid trade.
On placing Stops...I find the best thing to do is let time do it's thing...to see if the Call Options actually trade the way I anticipated, if it does, than to place a stop at a level I am comfortable with (usually 50% below price paid)), if not, then I get out of the trade and re-check my reasons for putting on the trade, and adjust for the next time.
Just my two cents.

March 8, 2010 | Unregistered CommenterMark

Thanks Mark

March 8, 2010 | Unregistered CommenterGold Prices

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