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Monday
Jul252011

The eurozone crisis is on pause, not over

FT Logo.JPG





You have to give it to the European Council. They are pretty good at stitching up impressive looking deals, having lowered expectation to a bare minimum beforehand. But the effectiveness of an agreement should not be gauged by the immediate market reaction, let alone by how the agreement compares with expectations.

For it to be a positive contribution to the eurozone debt crisis, it should meet three tests. Will it put Greece on a path towards sustainable debt reduction? Will the new rules for the European financial stability facility make contagion less likely? And is the participation of private investors realistic and fair? My answer to those three questions would be, respectively: no, no, and yes.


Regarding the first question, the Institute of International Finance estimated the total reduction in the net present value of Greek debt to be 21 per cent. Nicolas Sarkozy, the French president, talked about a 24 percentage point reduction of the ratio of debt to gross domestic product. His is a more conservative estimate. In other words, the Greek debt-to-GDP ratio would not peak at 172 per cent, as one forecast suggested, but at 148 per cent. None of these numbers will come even close to a sustainable debt level. On my own calculations, Greece requires a reduction in the net present value of its debt by about 50 per cent. This agreement comes short.

With the private sector contribution now fixed, any future reduction in the value of Greek debt would have to come from an increase in the maturity of the official Greek loan. I have no doubt that a portion of the debt will ultimately need to be folded into a eurozone bond. Officially, the European Union is still pursuing a variant of plan A – that Greece will be able to repay its debts in full. Its adjustment plan for Greece remains full of unbridled optimism.

An integral part of the Greek package is a €30bn provision for privatisation receipts by 2014, which is plainly ludicrous. This and other gaps will need to be plugged. That means that the refinancing need will be higher, and the reduction in the net present value lower.

I wonder, therefore, whether it was worthwhile to risk a selective default for such a meagre debt reduction effort?

EU negotiators persuaded themselves that they were able to control the fallout from a default. But that was dependent on the default being a limited one. At the same time, the scale of the private sector participation needed it to be sufficiently large to satisfy the eurosceptics in the German, Dutch and Finnish parliaments. This was no doubt a compromise that works politically. But it comes at the expense of debt sustainability. Even before the ink on this second package is dry, a third Greek package beckons. I am just not sure what the German and the Finnish sceptics will say when they find out.

Regarding the second question: has the agreement made life any safer for Spain and Italy? The idea of providing the EFSF with more flexibility is good. The rule changes are by far the most interesting aspects of the agreement. At present, the EFSF can only grant credits. Under the new rules, it will be able to act pre-emptively. Like the International Monetary Fund, it will have a flexible credit line. It will be able to purchase bonds on secondary markets, and it will be able to recapitalise banks. It can do all of these for any eurozone country, even those that are not part of an ordinary EFSF programme.

But there is a catch. The European Council did not raise the EFSF’s lending ceiling of €440bn. It is large enough to handle its three peripheral customers, but not Spain and Italy. An enlargement would have been necessary for the new-found flexibility to have any practical use. Should Italian bonds come under pressure again, do we really believe that speculators would be scared by a stability mechanism with a fixed and transparent spending ceiling?

The EFSF also remains constricted by its own operating rules. It can only start a programme of purchases on the advice of the European Central Bank, and it requires a unanimous vote by its members.

The best news relates to the decision on private sector participation. It is good that the eurozone has come to closure in this tedious debate. The terms of the various debt exchange offers are still bank-friendly, but not nearly as cynical as some of the earlier proposals. Contrary to what the European Council said, the private sector participation will be a blueprint for bail-outs that are yet to come. Second Irish and Portuguese programmes are likely. The northern Europeans will once again demand private sector participation. Now they know how it can be done, they will want to apply the same rules in the future.

Thursday’s agreement succeeded in staving off an imminent collapse of the eurozone. That is undoubtedly its greatest achievement. But we should not fool ourselves. It will only succeed if it is followed by other agreements that fix its gaps. The new EFSF rules will only make sense if the rescue mechanisms are allowed to develop into a European debt agency. The second loan package to Greece will be fine as long as we realise that there needs to be a third.

When the Europeans return from their holidays, they will still have the euro – and they will still have the crisis.

eurocrats 25 July 2011.JPG
"Tell me that Nigel Farage is not here, is he?"




Regarding www.skoptionstrading.com. We have now placed a number of trades in the options arena and they are progressing well.



For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with GlobalAutoTrading and therefore auto trading is now available for SK OptionTrader signals


Our model portfolio is up 338.11% since inception

An annualized return of 117.00%

Average return per trade of 40.41%

81 closed trades, 78 closed at a profit

Average trade open for 46.27days


sk chart 22 May 2011.JPG



The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.



To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

SK logo 26 May 2011.JPG




Sunday
Jul242011

Silly Reasons Not To Invest In Gold

We are currently bullish on gold. We would not consider ourselves gold bugs or perma-bulls. Sometimes we think gold prices go up, sometimes down, sometimes sideways and we place trades to reflect our view at the time. The purpose of this article is not to place gold on an alter and worship it, we are simply aiming to dispel some of the mythical reasons put forward by gold perma bears as to why one should not invest in the yellow metal. Once these reasons are eliminated from one's analysis, then one can form a more accurate view on whether gold prices are going up or down. Keeping these arguments in one’s decision making process will only make for distorted analysis.

We scoured the internet looking for reasons not to invest in gold and now present the reasons that we think should be eliminated from the bearish side of the debate.

The most ignorant reason we could find not to invest in gold was that apparently gold can be easily manipulated. According to this bizarre argument, “unlike paper currency that is impossible to manipulate in any way, gold can be accumulated by a group of connected buyers for the sole purpose of eliminating supply from the market.” The author then went on to cite the Nelson Bunker Hunt’s attempt to corner the market as an example.

We will concede that a driver behind silver hitting $50 in 1980 was largely due to the Hunt’s efforts to corner the market. We will also concede that central banks could dump their gold holdings on the market and this would decrease the price. However saying that paper currency is impossible to manipulate is one of the most preposterous things we have ever heard. Paper currencies are designed so that they can be manipulated by central banks. The central bank controls the supply of and interest rate earned on the currency. Gold has no interest rate, so cannot be manipulated in this way. Gold is also in limited supply and cannot be printed at will by central banks.

In the interest of putting the author’s arguments into context, they were written in March 2009 and gold prices have increased more than 50% since then.

Another amateur argument against gold is that for some 20 years (1980-2001), gold prices did nothing and anyone who had invested in gold would have lost money. Anyone who uses this argument clearly does not understand one of the fundamental features of financial markets. Markets are cyclical in nature and assets undergo both bull and bear markets. To put this as simply as we can, prices can go up or down.

To say that gold did nothing for a 20 year period and therefore is not worth investing in now (ignoring its terrific performance in the last ten years and the bull market that preceded 1980) is ridiculous. Market conditions change constantly. Sometimes they are bearish for prices, sometimes they are bullish. One must assess these conditions to form a view, not just extrapolate a trend from a handpicked segment of time.

Perhaps a more reasonable argument for not investing in gold is that it provides no income. In fact it almost always costs the investor to hold gold. This is sometimes referred to as “negative carry”. By purchasing gold the investor has forgone the interest that his/her money could have earned in the bank. They may also have to pay storage costs for physical bullion or a management fee for a gold ETF or other fund. However in today’s market environment, the interest foregone is minimal and some may even consider it negligible.

For example, instead of investing in gold one could have instead bought a risk free asset such US Government Bond. But with 2 year Treasuries yielding just 0.35%, is it really that big of a deal?

The point is that although it will cost you to own gold, this cost is dwarfed by the capital gains that one could enjoy. One does not invest in gold for a stream of income, as one might invest in stocks or bonds. Given that gold gained around 30% in 2010, chances are you shouldn’t be too concerned about forgoing the interest that money could have earned in the bank nor dividends that could have been earned in the stock market.

One of the most common anti-gold arguments put forward by those who do not understand gold is that one should not invest in gold because it has no utility. Oil can be used as fuel, corn can be eaten, steel can build bridges and buildings, but apparently all gold is really good for is looking pretty and a few dentistry applications. The major oversight here is that although gold may have some attributes that apply to commodities, it’s primarily function is as an alternative, independent, impartial currency.

The very fact that it doesn’t have many uses makes it a suitable currency substitute. Oil cannot be a currency as one day we will run out of oil. Corn cannot be a currency as we grow and consume corn so there is not a stable amount in circulation. Metals such as copper are not suitable as they are often “used up” in industries such as constructions (here we are using the phrase “used up” to indicate that copper would either be inside walls as wires so it cannot be removed and traded, or has been used in the manufacturing of a product where the cost of recovering the copper is higher that the market value).

Gold’s value comes from the same fundamentals that other currencies derive their value. It’s a function of purchasing power, global interest rates and inflation. Gold can even be thought of as a currency where the central bank that controls it has set interest rates are zero forever and fixed the money supply forever. In an uncertain world, the certainty surrounding gold makes it a strong currency.

Perhaps the most famous reason not to own gold comes from perhaps the most famous investor of our time; Warren Buffet. Buffet is an outstanding investor with a stellar reputation and we do not wish to take any credit away from his remarkable achievements. However Buffett shuns gold as an investment as he believes it has no utility. We would agree that gold has not utility in that it cannot be made into energy like oil or eaten like corn, but that is not the point. Gold is more a currency than a commodity. So how much utility do British Pounds have? Or US dollars? Or Yen? They have no more utility than gold. One cannot eat or use any of these currencies, so how are they different from gold? Would Buffet refuse to hold any currency since they have no utility? Of course not, but he would not view gold as a currency.

We will concede that other currencies pay interest, but they interest is minimal in the current environment. Gold is a store of value. Gold is a currency. Gold has no utility, which is what makes it a suitable alternative currency.

A classic argument for not buying gold would be that it has gone up significantly over the past decade. People do not want to buy when prices are high, they want to buy when prices are low. This is a reasonable argument. However following that theory, all those who subscribe to it would have been buying gold in the late nineties and over the turn of the decade, therefore they would have enjoyed significant profits to this point. But the reality often is that those who use this argument have never owned gold.

So whether you are bullish, bearish or neutral on gold prices, we would suggest that you take these reasons out of any analysis you are doing. These reasons are irrelevant and those who use them really do not have a solid understanding of the dynamics of the gold market. If you have a bearish view on gold and it does not include any of the reasons above, then that is fine. We are bullish on gold, but we could be wrong and everyone is entitled to their view. However in our opinion using these reasons as an argument not to own gold will result in distorted analysis and an invalid conclusion.

At SK Options Trading we have a strong focus on gold and we provide our subscribers with simple straight forward trading signals as well as market updates and commentary. Our signals are executed on US options based on ETFs, so are exactly the same as regular stock options.

The key stats on the performance of SK OptionTrader are as follows:

Our model portfolio is up 338.11% since inception
That's an annualized return of 117.00%
We have an average return of 40.41% per trade including losses
We have closed 81 trades, 78 closed at a profit
The average trade is open for 46.27 days


For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and therefore auto trading is now available for SK OptionTrader signals.

Subscribe for 6 months - $499

 

Subscribe for 12 months - $799

 



Return on SKOT Port 160711

Return on SKOT 10k
Saturday
Jul232011

Amazon vs. City Hall

Amazon logo 23 July 2011.JPG




By Jeff Clark, BIG GOLD

My local newspaper ran a story about the escalating battle between Amazon.com and the state of California. At issue is the collection of sales tax: Governor Jerry Brown signed a law requiring online retailers to collect state sales tax on purchases made by CA residents.
Before the ink dried on the legislation, Amazon severed ties with its estimated 10,000 affiliates in CA. These are – or were – small businesses that earned commissions on customers who clicked through their website to the online bookseller.

The immediate effect, of course, is not an increase but a reduction in tax revenue for the state, due to the loss of taxable income from the affiliates. And Amazon isn’t the only company that’s taken action; Overstock.com is doing the same thing, as well as others that don’t make the news. As usual, the government overlooked the unintended consequences of their legislation.

But the issue is greater than just the immediate tax ramifications. And it’s bigger than just Amazon. There are long-term consequences for tax revenue, employment, and perhaps even the quantity and quality of the goods and services being offered in the state.

With the biased newspapers, it starts with the “fairness” issue. Most seem to make no distinction between the type of businesses operating within the state, pointing to the “unfair advantage” Amazon has over storefront locations like Barnes and Noble. If B&N has to collect the sales tax, why shouldn’t Amazon?

This reasoning is typical shallow journalism and overlooks previous Supreme Court rulings. The high court ruled in 1992 that an out-of-state retailer cannot be forced to collect sales tax unless it has a physical presence in the state. It’s not the level playing field that prejudiced reporters try to claim; brick and mortar retailers use roads and other resources paid by local taxpayers, while the out-of-state company has an almost zero footprint. This was the crux of the Supreme Court ruling.

Nevertheless, California tried to tax the Internet in 2000 and again in 2009, with legislation declaring that affiliates, even though not employees of the company, constituted a “physical presence.” Both governors at the time vetoed it. The third time was a charm, though, and CA is now the ninth state to pass a law taxing Internet sales.

Amazon has already introduced a ballot referendum to overturn the law, though some lawmakers (all Democrats) claim the ballot initiative is unconstitutional. It’ll likely go to court, and if it qualifies for the ballot, voters like me will probably see it next year in our little white booklet.

Let’s not forget that the tax is already supposed to be paid by the consumer. I add sales tax for Amazon and other online purchases to my income tax return every year. I’m sure many people don’t, but I’m also certain the government’s projected tax revenue from this law is overblown.

In my mind, there’s a more fundamental question for those making the fairness argument: Who is responsible for whose mistakes?

Government is in desperate need of revenue – but whose fault is that? Why should Amazon be responsible for the fiscal irresponsibility of the California legislators? It’s no secret the state has major financial shortfalls – but how’d they get there? Under Gray Davis, the state went from a budget surplus to a budget deficit in less than four years. We’ve never recovered. Why is that suddenly the problem of a business that works in a different state? Shouldn’t the government be cutting back on their budget?

The long-term consequences on tax revenue are obvious. It seems a tenet of common sense that lowering tax rates attracts more business and thus more tax revenue. That’s a simplistic view, but the direction is correct. More businesses would move here if the state government passed laws that enticed them to do so, and maybe I would spend some money on these goods and services and thus create more tax revenue.

Amazon decided against moving to the San Francisco bay area, in spite of it being one of the best sources for technical talent, due largely to the tax structure of the state. “It didn’t pass the small state test,” said CEO Jeff Bezos. It’s a well-known fact that many businesses decide against headquartering in the state due to the high-tax/high-regulation atmosphere. And many are leaving for the very same reasons. This all reduces long-term tax revenue.

Then there’s the employment issue. Current actions by state leaders are driving this source of employment away, along with many others. Think about it: if the primary source of your revenue came from businesses and workers paying taxes, wouldn’t you do everything in your power to attract businesses and employ workers? This certainly doesn’t seem to be the path government leaders are pursuing.

Last, these actions ultimately lower the quality and number of goods and services available to me and my fellow Californians. This is not the case with Amazon and most other online retailers, as we can still place orders. But the underlying message to businesses considering CA as home is the same: You better think twice about coming here.

This trend is well underway, and with fewer companies wanting to do business in the state, the eventual result is fewer products, scarcer services, fewer choices overall, and lower quality. If you doubt that, just look at how difficult it is to open a bank account in Switzerland; it’s almost impossible now for a U.S. resident to do this, and it wasn’t that long ago that the Swiss would do anything to attract U.S. customers. It’s the same principle here; you make it too onerous to do business here, they’ll go elsewhere, reducing the options available to residents.

What can be done? Reversing this vicious cycle will have to include government leaders. And it starts with them answering one simple question: Businesses and consumers will always react to new laws and revised tax structures; what reaction do we want them to have? Do we want them to react like Amazon? Or do we want them to be knocking on our door to come here?

Until government leaders understand, on their own or through voters, that it is businesses and workers they want to see prosper, no one will, including the State. And that applies to the U.S. of A., too.

[It’s not just state governments that are broke, though – the staggering debt of the federal government and the Fed’s pumping newly printed greenbacks into the economy make the dollar lose more and more of its value. Protect yourself with gold, silver, and sound large-cap precious metals stocks that can weather any storm. Try BIG GOLD today for only $79 a year… and find the best investments to preserve your nest egg.]




Regarding www.skoptionstrading.com. We have now placed a number of trades in the options arena.




For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with GlobalAutoTrading and therefore auto trading is now available for SK OptionTrader signals


Our model portfolio is up 338.11% since inception

An annualized return of 117.00%

Average return per trade of 40.41%

81 closed trades, 78 closed at a profit

Average trade open for 46.27days


sk chart 22 May 2011.JPG



The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.



To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

SK logo 26 May 2011.JPG




Friday
Jul222011

SK OptionTrader Subscribers Gain Over 260% in 3 Weeks

SK OptionTrader closed three digit profits through multiple trades shortly before the correction in both gold and silver. SK OptionTrader has since then issued another trading signal that now shows phenomenal gains after just 3 weeks. The trading signal was issued on July 1st 2011 and now after only 3 weeks this position is showing a gain of 261.76%.

At this point many would choose to take profits given that our capital has more than tripled. We will continue to hold this position for the near future.

Why would we not take profits?

We think that the position could triple again from here!

SK OptionTrader wrote to its subscribers on June 14th 2011 saying that we were looking at opening this position since “the risk reward dynamics in these trades could be about to become too good to pass up”. We also stated that we felt prices would drift lower, allowing us to gain a better entry point to the trade.

By June 27th 2011 we informed our subscribers that the risk-reward dynamics of this trade were becoming attractive and that we felt it would be possible to at least quintuple any capital invested in the trade.

On July 1st 2011 we issued a trading signal to open this position. Our patience had paid off, as by this point the cost of opening the position was 43% less than it had been on June 14th when we had first informed our subscribers of our intention to open this position.

Our past trading record and our comments that this position was expected to make more than 5 times the capital invested ensured that many of our subscribers felt confident in opening this position.

Subscibers who opened this position at a similar price to SK OptionTrader now have gains of over 260% in only 3 weeks.

Even those who have subscribed since our last update concerning this trade would now be up 27% in just one week.

We feel that this trade will continue to gain, meaning that if you were to subscribe and open this position now, you could be sitting on gains that pay for your subscription in less than a week.

“We aren’t about to flip these calls for a 14% gain, this trade is one that is looking for a home run, a return of multiple times the capital invested”. This is what we have informed our subscribers, and we stand by this comment as we see this trade continue to gain in value.

If you had subscribed one month ago and invested $1000 in this position you investment would have increased to $3617.60. That’s an incredible profit of $2617.60 in just 3 weeks, paying for your $199 subscription fee more than 12 times over.

To subscribe to our service and find out the details of this highly profitable trade then subscribe below.

In the interest of full disclosure, we do have other trades open at present and all of our open trades are showing significant gains.

In the near future we are planning to open a number of new positions that we feel will be extremely profitable, so now is a perfect time to subscribe and increase the profitability of your portfolio.

We provide our subscribers with simple straight forward trading signals as well as market updates and commentary on the market situation.

Now all you have to do is click the subscribe button to see our trading recommendations that could have more than tripled your capital in three weeks, and paid for your subscription fee 12 times over in a matter of days.

Other key stats on the performance of SK OptionTrader are as follows:

Our model portfolio is up 338.11% since inception
That's an annualized return of 117.00%
We have an average return of 40.41% per trade including losses
We have closed 81 trades, 78 closed at a profit
The average trade is open for 46.27 days


For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and therefore auto trading is now available for SK OptionTrader signals.

Subscribe for 6 months - $499

 

Subscribe for 12 months - $799

 



portfolio-chart-220511-resized.jpg
Thursday
Jul212011

The Greek mini default and bailout all in one package

Greek Debt 22 July 2011.JPG


I guess the thinking is that a mini default is perceived to be better than a fully fledged default if this one goes through. However, it raises the question of just where does it stop, how many more bailouts will there be as other countries come forward with the begging bowl for financial assistance?

This is the latest 'take' on the situation from Simon Kennedy and Jonathan Stearns of Bloomberg:


July 22 (Bloomberg) -- Euro-area leaders redoubled efforts to end the 21-month sovereign bond crisis as they erected a firewall around Spain and Italy and risked temporary default to lighten Greece’s debt burden.

After eight hours of talks in Brussels, leaders announced 159 billion euro ($229 billion) in new aid for Greece late yesterday and cajoled bondholders into footing part of the bill. They also empowered their 440-billion euro rescue fund to buy debt across stressed euro nations after a market rout last week sparked concern the crisis was spreading. The fund can also aid troubled banks and offer credit-lines to repel speculators.

The euro strengthened as officials drew concessions from Germany, the European Central Bank and investors for a twin- track strategy to support Greece and ensure its woes don’t spread. The summit is the latest in a running-battle to resolve the crisis amid calls this week for tougher action from U.S. President Barack Obama and the International Monetary Fund.

“These measures are welcome because they create the best possible conditions for Greece and other peripheral countries to put their houses in order and hence limit the risk of contagion,” said Marco Valli, chief euro-area economist at UniCredit SpA in Milan. “Still, the market will continue to price some probability that troubled countries will not be up to the challenge.”
Regaining Initiative

The euro jumped as much as 1.6 percent to $1.4435 yesterday as details of the plan emerged. It traded at $1.4419 at 8:02 a.m. in Sydney. Greek, Italian and Spanish bonds rose, with the yield on Greece’s two-year security plunging more than 400 basis points to 33.81 percent.

The Greek financing package will consist of 109 billion euros from the euro region and the IMF. Financial institutions will contribute 50 billion euros after agreeing to a series of bond exchanges and buybacks that will also cut Greece’s debt load, the leaders’ communiqué said.

The European Commission plans to brief reporters on the package’s technical details at 1 p.m. in Brussels.

The leaders sought to regain the initiative after market turmoil intensified amid a spat between ECB President Jean- Claude Trichet and German Chancellor Angela Merkel over how to manage the crisis. The outlook was worsened by signs that Greece was backsliding on axing its budget deficit as it struggles to cut a debt of 143 percent of gross domestic product. A Bank of America Merrill Lynch poll this week showed investors trimming their European stock holdings to the lowest in more than a year.

European Monetary Fund

French President Nicolas Sarkozy compared the transformation of the bailout fund to the creation of a “European Monetary Fund.”
“This meeting came at a difficult time,” Merkel told reporters. “I’m satisfied with the outcome because the euro countries showed today that we are up to the challenge, we can take action.”

The risk is that the drive will fall prey to the same internal EU wrangling that blunted previous drives to stop the crisis. EFSF bond purchases will need the “mutual agreement” of member states and the fund may not be large enough should markets turn on Italy and Spain at the same time. Sarkozy and other leaders also stressed that the Greek package won’t be replicated for other countries.
Crisis Management

European officials tried to draw a line under the crisis in May 2010 when they set up the bailout fund and the ECB agreed to buy government bonds of debt-laden nations. That didn’t stop Ireland and Portugal needing bailouts when splits over how to make investors participate in financial rescues prompted a new wave of bond market selling later in the year.

The pact still doesn’t “make a significant dent” in Greece’s debt and may disappoint investors by failing to boost the size of the rescue fund, said Jonathan Loynes, chief European economist at Capital Economics Ltd. in London. “We doubt that this package alone will bring an end to recent contagion effects and prevent the broader debt crisis from continuing to deepen over the coming months.”

For now, Merkel and her allies have succeeded in their drive to make investors co-finance bailouts after voters balked at the cost of saving spendthrift nations.

Bond Exchange

Banks will reduce Greece’s debt by 13.5 billion euros by exchanging bonds and “potentially much more” through a buyback program still to be outlined by governments, said the Institute of International Finance, a Washington-based group representing banks.
Investors will have the option to exchange existing Greek debt into four instruments. Three will be fully collateralized by AAA-rated zero-coupon securities and have a 30-year maturity, and the fourth will be for 15 years and partially collateralized by funds held in an escrow account.

Crisis managers are aiming for a 90 percent participation rate from Greek bondholders.

“With this offer, the global investor community is stepping forward in recognition of the unique challenges facing Greece,” said IIF Managing Director Charles Dallara. The gathering was also attended by Deutsche Bank AG Chief Executive Officer Josef Ackermann and BNP Paribas SA counterpart Baudouin Prot.

The ECB removed an obstacle to a new bailout after Trichet softened his opposition to a default which may be declared by credit rating companies if the debt swap occurs. The ECB had until now said the euro region’s first sovereign default could spark a bout of financial turmoil, clashing with Merkel’s position that a default could be inevitable.

Defaulted Collateral

Trichet signaled governments will guarantee any defaulted Greek debt offered as collateral during money market operations. That may enable Greek banks to keep tapping the ECB for emergency funds. Officials said the aim would be limit any credit event to a few days.
“The ECB pushed the argument as far as it could,” said Laurent Bilke, an economist at Nomura International Plc in London who used to work at the ECB. “It is Europe, everything is a compromise.”

Under the plan, Greece and fellow bailout recipients Portugal and Ireland will also have the interest rate on emergency loans pared. Maturities will be lengthened to as long as three decades with a 10-year grace period.

Trichet may gain solace from the bailout fund’s wider remit which he repeatedly sought since the ECB suspended its own bond buying program in April amid concern it was doing the work of governments. Germany previously rejected broadening the European Financial Stability Facility, whose size was beefed up to its original lending target as recently as last month.

Direct Purchases

The facility will be able to buy debt directly from investors so long as creditors agree and the ECB declares “exceptional financial market circumstances.” EU President Herman van Rompuy said the purchases could be used to stabilize markets as the ECB was doing or to help countries retire debt at a discount.

The fund may also start passing money to countries to support banks a week after stress tests on 90 financial institutions put as many as 24 under pressure to show they can raise capital. Precautionary credit lines would allow it to lend to nations before markets freeze, mimicking a system introduced by the IMF for states that start losing investor faith even though they have relatively sound economies.
Governments will have to ratify the facility’s new powers, posing a potential obstacle given domestic critics in Germany, Finland and the Netherlands.

Leaders dumped a suggestion to finance Greek aid through a tax on banks with a French official noting the threat had nudged banks into agreeing to help in other ways. While they signaled no shift toward issuing joint bonds, Germany’s Deputy Foreign Minister Werner Hoyer said in an interview on July 20 that it may eventually back the concept “if we further develop the European Union towards a political union.”

So there we have it, we just cant see this having a happy ending, hold onto your gold and silver with an even tighter grip.


Regarding www.skoptionstrading.com. We have now placed a number of trades in the options arena.


 For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and therefore auto trading is now available for SK OptionTrader signals

For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with GlobalAutoTrading and therefore auto trading is now available for SK OptionTrader signals


Our model portfolio is up 338.11% since inception

An annualized return of 117.00%

Average return per trade of 40.41%

81 closed trades, 78 closed at a profit

Average trade open for 46.27days


sk chart 22 May 2011.JPG



The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.



To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

SK logo 26 May 2011.JPG




Thursday
Jul212011

Euro Bonds May Be the Best Bet

euro bonds 21 july 2011.JPG



The bond markets are sending Europe’s leaders an unmistakable message: The opportunity to contain the euro area’s debt crisis is slipping away. If they want to save the union and its currency, the leaders will have to consider something far more ambitious than what’s been spelled out so far. Perhaps the unspecified agreement French President Nicolas Sarkozy and German Chancellor Angela Merkel reportedly reached last night on Greek debt marks the beginning of a wider -- and bolder -- effort.

Only three weeks after Greece averted disaster by passing the harsh austerity measures needed for a second bailout, investors have refocused their concern on the much larger economies of Spain and Italy. The yield on the 10-year Italian government bond, for example, has risen almost a percentage point to 5.6 percent as creditors demand bigger returns to compensate for the perceived risk of default.

It’s hard to overstate how dangerous these developments are for the euro area and the world.Italy’s debts are about three times more than those of Greece, Ireland and Portugal combined. Even one extra percentage point in borrowing costs would require Italy to cut annual spending by an added $27 billion (19 billion euros) to stabilize its debt burden. To get there, Italy would need to roughly double the austerity measures it passed just last week.

European leaders’ decision to hold an emergency meeting this week suggests that they recognize the need to restore confidence fast. But they’re still behind the curve. Even a hefty increase in an existing $626 billion (440 billion-euro) stabilization fund, along with proposals to shore up banks, won’t fix the problems. There are two fundamental uncertainties: How much investors and banks stand to lose if Ireland, Portugal, Spain, Italy and even Belgium go through restructurings, and how policy makers will prevent those losses from toppling the region’s financial system.


Radical Solution

Only a radical solution can stop the rot. Politically fraught as it may be, Sarkozy and Merkel need to do what Alexander Hamilton did in the 18th century to resolve a similar crisis in the fledgling United States: Push for the creation of a federal finance ministry with the power to assume the debts of individual euro-area members and the taxation authority to pay the debts.

The finance ministry could offer to exchange the bonds of individual euro-area governments for new euro bonds backed by the full faith and credit of the entire 17-nation group. The ministry could make the trade at full face value or differentiate among countries -- offering, say, 50 cents on the euro for Greek debt. Immediate provisions would have to be made to recapitalize banks hit hard by such losses.


Far From Ideal

The solution is far from ideal. Germany and other fiscally prudent nations would probably face higher borrowing costs. Persuading individual leaders and the people they represent to cede so much sovereignty to a unified finance ministry would also be a massive political challenge. But it might be Europe’s best bet at providing certainty and restoring confidence.

Such a euro-zone debt swap isn’t as expensive as it might seem. The euro area’s combined government debt, including the cost of bailing out banks, would amount to roughly 90 percent of its total annual economic output. This is in line with the U.S. debt level and a bit more than Germany’s, which stands at about 80 percent of GDP.

In return for backing the finance ministry, Germany and France, the union’s core members, would get much more power to enforce debt and deficit limits. Individual governments would have no authority to issue euro bonds to finance excess deficits, and financially strapped governments such as Greece would have a hard time borrowing on their own.

The position of individual governments would be similar to that of American states, which must operate under self-imposed balanced-budget rules to maintain access to credit markets. To ease the pain of the fiscal straitjackets, a European finance ministry would have to help support countries’ social safety nets in difficult times, just as the U.S. government does by aiding the states with unemployment insurance and stimulus spending.

All too often, the political will to address financial crises comes too late -- after markets have done their damage. The unfolding damage is painfully visible; let us hope that the political will becomes equally manifest in the meeting rooms of Brussels.

Regarding www.skoptionstrading.com. We have now placed a number of trades in the options arena.


For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with GlobalAutoTrading and therefore auto trading is now available for SK OptionTrader signals


Our model portfolio is up 338.11% since inception

An annualized return of 117.00%

Average return per trade of 40.41%

81 closed trades, 78 closed at a profit

Average trade open for 46.27days


sk chart 22 May 2011.JPG



The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.



To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

SK logo 26 May 2011.JPG




Monday
Jul182011

Decline In US Real Rates To Send Gold Past $1800

One of main determinants of gold prices in the medium to long term is US real interest rates. US real rates are the rate of interest that can be earned on US Government bonds, minus the expected rate of inflation. One can monitor US real rates by watching the yields on Treasury Inflation Protected Securities (TIPS) and we watch them closely since they exhibit a negative relationship with gold. Currently when we analyse where US real rates are in relation to gold prices, we come to the conclusion that gold prices are low in relation to US real rates. However most importantly we think US real rates will likely head significantly lower, sending gold to $1800+ within a matter of months.

GOLD vs 10y TIPS

The basic fundamentals behind this inverse relationship are that when US monetary policy is looser, real rates fall and therefore investors buy gold for a number of reasons. We have covered this relationship in previously commentaries, but for new readers will we run through the dynamics at play here. Firstly, lower real rates could imply higher inflationary expectations in the future therefore gold is bought as a hedge against this possible inflation. Secondly, lower real returns in Treasuries drives investors into risk assets in search of a higher return. This also sends gold higher but it also sends most commodities, risk currencies and equities higher too. Thirdly, lower real returns on Treasuries reduce demand of US dollars, causing the dollar to fall and therefore the gold price to rise in US dollars. Finally, looser monetary policy implies that the economic situation is not as rosy as many would like to believe, so if the Federal Reserve acts by loosening monetary policy and driving down real interest rates then that sends a message that the economy is in a bad place therefore investors buy gold as a safe haven asset. There are probably many more reasons for this relationship, but we have just tried to cover the main ones.

Many gold investors tend to focus on the relationship between the US dollar and gold, citing that a lower dollar leads to higher gold prices in US dollars. Whilst this is an important dynamic of gold prices, the relationship gold has with US real interest rates is perhaps more important and more reliable for trading and investment purposes. For the first few years of this gold bull market, it was sufficient simply to acknowledge the USD down, therefore gold up dynamic, but in recent years things have changed. Over the past couple of years gold has rallied when the greenback has been making gains, as well as when it was weakening, therefore investors must now take note of the inverse relationship between US real interest rates and gold, which has been observed more consistently.

Whilst this inverse relationship is not perfect, it does have a distinct theoretical advantage over simply watching the USD versus gold relationship as sometimes both US dollars and gold can be in demand as safe haven assets. For example if there were to be a crisis, such as the recent sovereign debt issues in Europe, money would flow into gold in search of a safe haven, but also into dollars to escape the European issues. This creates what we dubbed "The Eurozone Crisis Premium" in the gold price. Investors would sell European bonds driving their yields higher, and buy US bonds driving their yields lower. Gold would be rising and the US dollar would be rising, negating their usually negative correlation. However US rates would be falling as investors bought treasuries as a safe haven and therefore the inverse relationship between gold and real US treasury rates is more likely to hold. That being said, we do of course closely monitor the currency markets as well as the interest rate markets, since both have major impacts on the price of gold.

The theoretical aspects of this relationship may all be well and good, but what really matters to investors and traders such as us is how these theories can be applied in the real world, and how effective they are in producing profitable signals to trade from. So here is a practical example of how we applied and profited from this relationship in the real world. In late August 2010 we noticed that US real rates were falling far more rapidly than gold prices were rising. We also held the view that the Federal Reserve was going to embark on another round of quantitative easing within the next three months; therefore we did not see US real rates rising, given that the Federal Reserve would likely begin buying bonds heavily. From this we inferred that gold prices we set to stage a major rally to a new all time high, so signalled to our subscribers to buy a great deal of out of the money GLD call options to benefit from this rise (more details can be viewed in our full trading records, which is published on our website). We banked profits in percentage terms, ten times higher that the gains made by gold or the HUI gold mining index during that period, and when the market began to price in QE2 and US real rates fell further we bought again and enjoyed a similar return.

We are now of the opinion that US real interest rates are low in relation to the current gold price and are heading lower, therefore we see the gold price going still higher to $1800 within the next six months. Of course this works both ways, so if US real rates begin rising there could be a serious correction/further consolidation in gold. We are monitoring this situation closely and adjusting our position (and that recommended to our subscribers) accordingly. However we are struggling to see what could either seriously dampen inflation expectations or cause a substantial rise in US interest rates, hence why we are very bullish on gold at present.

If the economic situation improves, inflation expectations will rise. If the economic situation deteriorates then central banks will likely combat this with further easiing of monetary policy, which will be explosively bullish for gold prices. Further loosening of US monetary policy could come in the form of QE3 or perhaps a cap on longer term rates, which could be achieved by the Federal Reserve stating a target two year interest rate. We think that being long gold is the best way to play this move and that options offer the best trade from a risk-reward perspective. Our options trading service has outperformed gold, the HUI and also the doubled leveraged gold ETNs.

GOLD vs 7y TIPS

Hopefully this article will have drawn the reader’s attention to this relationship gold has with US real rates and we suggest that it form a pillar of your fundamental analysis with respect to gold. This is not to say other relationships such as the USD and gold are not to be noted, they should be, but in conjunction with US real rates. By pulling all these relationships together one can get a better picture of where the yellow metal is headed and when it is going to move, which ultimately leads to more profitable trading.

As mentioned before, we are of the opinion that gold prices are heading to $1800, so if you would like to take full advantage of this then please visit our website www.skoptionstrading.com to sign up to SK OptionTrader, our premium options trading service that costs just $199. We have closed 81 trades with 78 winners, for an average gain of 40.41% per trade including the three losing trades. We run a model portfolio for subscribers to follow if they wish, with suggested capital allocations to each trade and this model portfolio has an annualised return on investment of 117%.

We think that options are the best way to benefit from this coming major rally in gold prices. We trade options based on GLD, so one can execute the same trades with a simple US brokerage account that has stock options trading. All of our trades have limited downside and given the potential explosive upside in gold over the coming months, we think the risk-reward in some options trades at present are too good to pass up. On 1st July we recommended such an opportunity which is now showing a 210% profit in two weeks, and we think it could triple again from here. So, to find out what this trade is and others like it sign up now as we are about to place a number of trades that we think will prove to be extremely profitable over the coming months.

The charts in this article are plotted with the gold price in US dollars on the left axis and inverted US real interest rates on the right axis to show the negative relationship between the two. The US real rates data is taken from the US Treasury Real Yield Curve and are commonly referred to as "Real Constant Maturity Treasury" rates, or R-CMTs. Real yields on Treasury Inflation Protected Securities (TIPS) at "constant maturity" are interpolated by the U.S. Treasury from Treasury's daily real yield curve. These real market yields are calculated from composites of secondary market quotations obtained by the Federal Reserve Bank of New York. The real yield values are read from the real yield curve at fixed maturities, currently 5, 7, 10, 20, and 30 years. This method provides a real yield for a 10 year maturity, for example, even if no outstanding security has exactly 10 years remaining to maturity. Gold data is taken from the London Bullion Market Association.

For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and therefore autotrading is now available for SK OptionTrader signals.

Subscribe for 6 months - $499

 

Subscribe for 12 months - $799

 

Return on SKOT Port 160711

Return on SKOT 10k
Monday
Jul182011

Gold hits $1600/oz in early UK Trading

gold chart kitco 18 july 2011.JPG

Looks like a nice start to the week with gold prices hitting $1600.10/oz on the London Stock Exchange early this morning, UK time. Silver also joined in the fun and was trading at $40.09/oz as we write. We'll let the picture tell the story, have a good un.



Regarding www.skoptionstrading.com. We currently have a number of trades on the drawing board, two of which have been placed and are now showing a profit.


For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and therefore auto trading is now available for SK OptionTrader signals.


Our model portfolio is up 338.11% since inception

An annualized return of 117.00%

Average return per trade of 40.41%

81 closed trades, 78 closed at a profit

Average trade open for 46.27days


sk chart 22 May 2011.JPG



The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.


To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

SK logo 26 May 2011.JPG




Sunday
Jul172011

Gold is Not Money

Ben Gold is not money 18 July 2011.JPG


So there you have it, after 6000 years of being money, gold is not money according the Federal Reserve Chairman, Ben Bernanke. Ron Paul asked him directly and the answer was 'no' as you can see on this five minute clip. This is a strange comment coming at a time when gold prices are making all time highs as we can see on chart below, where gold is sitting at $1590.10/oz.

Our reading of history tells us that gold has long been recognized as a medium of exchange for international trade and a consistent store of value or wealth. We will have to agree to differ with Ben Bernanke on this point and try to make the best of the situation as we see it.

Gold chart 18 July 2011.JPG

With real interest rates being negative an alternative to paper money is sort after by those who need to protect whats left of their wealth, hence both gold and silver prices have been making steady progress for the last ten years. Have the fundamentals changed for the precious metals, not in our humble opinion, the euro-zone is drowning in debt as clueless politicians dash from meeting to meeting in the hope that someone will pull a rabbit out of the bag. Some hope!

Across the pond we have a president, who like most politicians is focused on keeping his ass in the White House to the detriment of the American economy. All around us government, at all levels, has grown to monstrous proportions and now acts as a enormous drag on the private sector, which is battling to merely survive. There comes a time when we have to take medicine which is unpalatable, but necessary in order to recover, but those who are in a position to administer such medicine just don't have the courage to do so and so we stagger from a sneeze to the flu to pneumonia in an economic sense.

We are stuck in this quagmire and can only anticipate that things are going to get worse before they get better. The tragedy here is that as things do get worse, those responsible for dragging us down will continue to interfere at a greater and deeper level making the situation worse. Under the banner of what is 'good for us' we will progressively lose our ability to operate as we see fit and will be corralled into a highly controlled state pig pen.

So, Defense how do we get the ball back?

First up is that the trend is your friend and both gold and silver have performed spectacularly well over the last decade so stick with them. Make sure that you can 'touch' your precious metals, keep them out of the banks and in a secure privately owned depository if its a large amount or in a safe place close to you if its a small amount.

The next step is to acquire a small number of quality mining stocks, something that we did some time ago and occasionally increase our exposure as and when the opportunity for a bargain presents itself. However, we are looking at the mining sector with some trepidation at the moment despite a growing call for these stocks to explode higher any minute now. As we see it the financial crisis is not behind us, it is in front of us and when it comes

there is the possibility that both gold and silver producers will be considered as 'stocks' and will be sold off regardless of their fundamentals, in the rush to generate cash and meet margin calls, etc. So for now we are observers here rather being active participants, but we still hold a core position in stocks.

The question of leverage and how to use it is often put to us and yes it does have a place in an investment strategy. You could borrow money to make a purchase, you could do the same by buying on margin, however, we don’t recommend either as the downside can and has been a painful financial bath for some. You could sally forth into the futures market and some of our subscribers have been successful using such a vehicle, however, your loses can be limitless, which in turn can lead to a few sleepless nights. If you can't sleep then you are in too deep and being tired is not conducive to good decision making. Our preference at the moment to utilize options to give our trading account a bit of a boost. Once an option has been purchased then you can relax a little as the purchase price is the maximum that you can lose so your loses are limited. Although you do need to stay vigilant and disciplined as the time factor is working against you and is constantly decaying the value of your position. We cannot overstress the importance of you being absolutely confident in that your purchase has the ability to move into profit quickly. Not for those of a nervous disposition as you can imagine. However we did receive a really nice comment on our site this morning regarding our latest trade which read as follows: “Still in the trade at a nearly $7000 profit in addition to the other trades. I have nearly doubled our self-directed 401k in the last year with your service. Thanks so much for your service.” So its not all doom and gloom out there, but it does take a little time to become aware of the state we are in and just what lies around the corner. Get your head up and take a good look at your surroundings, note the positives and the negatives and keep asking the question of just how can you best position yourself to get through the next few years, you may be surprised by the quality of your own skill sets and your own ability to apply them to great personal advantage.

Finally, try and trade in a relaxed manner, with a smile on your face and not when you are wound up as tight as a drum, you will make better judgment calls that way. For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and therefore auto trading is now available for SK OptionTrader signals.














Regarding www.skoptionstrading.com. We currently have a number of trades on the drawing board, two of which have been placed and are now showing a profit.



Our model portfolio is up 338.11% since inception

An annualized return of 117.00%

Average return per trade of 40.41%

81 closed trades, 78 closed at a profit

Average trade open for 46.27days


sk chart 22 May 2011.JPG



The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.


To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

SK logo 26 May 2011.JPG




Saturday
Jul162011

210% Gain in Two Weeks for SK OptionTrader Subscribers

After cashing out with triple digits profits before gold and silver prices corrected, subscribers to SK OptionTrader only had to wait a short time before we recommended yet another trade that has enjoyed extraordinary gains in a short space of time.

A trade recommended to SK OptionTrader subscribers on July 1st 2011 is now showing a gain of 210.29% after just two weeks.

Are we taking our profits and closing the trade, since we have tripled our capital? No.

Why not?

Because we think the trade could triple again from here!

On June 14th we wrote to SK OptionTrader subscribers saying that we were looking at placing this trade since “the risk reward dynamics in these trades could be about to become too good to pass up”. We said that we were waiting for prices to drift lower before we placed the trade.

On June 27th we informed subscribers that the the risk-reward dynamics were becoming attractive to us and we stated that we thought it was possible to at least quintuple the capital invested in the trade.

Then on July 1st we signalled to enter the trade. Our patience paid off since the cost of entering this options trade was now 43% lower than it was just two weeks before on June 14th when we first stated our intention to place the trade.

Given our comments that we thought it was possible to make 5 times one’s money in this trade and our track record in options trading, many subscribers followed us in to this trade.

Those subscribers who bought at a price similar to ours our now sitting on a gain of more than 200%.


Even buying more than a week later, would have doubled one’s capital.

The best part of this trade is that we think there is a lot more to come.

As we told our subscribers, “we aren’t about to flip these calls for a 14% gain, this trade is one that is looking for a home run, a return of multiple times the capital invested”.

Since this trade is still open we cannot reveal its details, as it would be unfair to our current subscribers.

However if you would like to find out what the trade is you can subscribe for just $199.

Just think if you had subscribed this time last month and placed $1000 in this trade, you could be sitting on a gain of 210.29%.

Your $1000 investment would now be worth $3102.90.

That’s a profit of $2102.90 in two weeks, which pays for a subscription more than ten times over!

If you think we are worth a try and you would like to find out what this trade is along with other trades in the future than you subscribe below.

In the interest of full disclosure, we do have other trades open at present and all of our open trades are showing significant gains.

We are about to issue a number of new trades that we think could be extremely profitable, so now is a great time to get on board.

Our subscribers get straightforward buy and sell signals as well as market commentary, which make options easier to understand and ensure trades are simple to execute.

So click the subscribe button to sign up and see our trading recommendations that could have tripled your capital in two weeks, and paid for your subscription fee ten times over in a matter of days.



Other key stats on the performance of SK OptionTrader are as follows:

Our model portfolio is up 338.11% since inception

That's an annualized return of 117.00%

We have an average return of 40.41% per trade including losses

We have closed 81 trades, 78 closed at a profit

The average trade is open for 46.27 days


For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and therefore autotrading is now available for SK OptionTrader signals.

Subscribe for 6 months - $499

 

Subscribe for 12 months - $799