SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Advanced Option Strategies
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: OX who wrote (336)5/28/2001 3:40:17 PM
From: tyc:>   of 355
 
This thread is so dead that it's probably just like sending a PM to you .

On both the No Clowns and the Winter threads I have had discussions about the "option value of mines". The conclusion is that a mining stock bears a similarity to a call option.

The upside potential of the "option value of mines" is destroyed by hedging. That suggests an interesting short straddle of a mining company that hedges its production such as ABX, hedging the upside risk of the short straddle with a few common stock of a non-hedger.

I have today sold such a straddle (ABX), thereby putting C$1,000 into my income account. I sold the straddle at the Max Pain strike resulting in a bearish straddle. A likely pick as a hedge will be a few shares of Newmont. Even a few shares will keep pace with ABX short calls on the upside, and if necessary i can always add a few more shares of an even more volatile miner.

Thought you might be interested. I hope you will read the discussions on the threads mentioned 'cause I sure wd like to hear your views.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News