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Gold/Mining/Energy : Gold Price Monitor

GDXJ 98.59

-2.8%

Nov 13 4:00 PM EST

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To: The Barracuda™ who wrote (43789)	10/26/1999 5:43:00 PM
From: Rob Hinton	Read Replies (2) of 116759

Could someone help a neophyte on this: "Even lite hedgers, like Newmont, could have problems. They're short 2.35 million oz in calls at around 375 ( put on at the low and it's cost them $60 million so far ). If gold rockets to 600, their assets and reserves and daily earnings will rise - but they should have a margin call for $500 million on the calls." How do these calls work? Is this the case where a gold call is not the same as a stock call? For ex: I own 100 shares of xyz (at $50) and sell a $60 call. If the stock explodes upward to $75 I don't get a margin call. I will lose the stock (as it is called away) but I get the $60 share price plus the premium I collected when I sold the call. The only "loss" I have is the inability to participate in the appreciation above the $60 strike price. Assuming I paid $50 for the stock I still walk away with $10 + premium - hardly a "loss." Would appreciate any help someone might have on this. Thanks! Rob

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