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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: IngotWeTrust who wrote (44278)10/29/1999 9:19:00 AM
From: Lightning  Read Replies (2) of 116759
 
Has there been any discussion on whether the calls these companies have written are American- or European-style options? For American-style options, the owner has the right to exercise at any time prior to expiration. For European-style options, the owner can only exercise at a set time, usually the day prior to expiration. If the mining companies were smart, they would have written European-style options to match their potential liabilities to deliver against future production. I find it hard to believe that a company with anyone worthy of the title CFO would be stupid enough to write X million ounces of American-style call options when their annual production is some small fraction of X.
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