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Gold/Mining/Energy : Newmont Mining(NEM) & Newmont Gold(NGC)
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To: Traveling Man who wrote (523)5/26/2002 2:11:27 PM
From: Tommaso  Read Replies (2) of 587
 
You can buy LEAP options on NEM out to Jan 2004. That allows nineteen months before expiration. The leverage on the strike 20 calls right now is better than 2-to-1, that is, every dollar the prices of the stock goes up raises it about 3%, whereas it raises the option value about 7.6% (stock selling about 30, option about 13; option symbol LIEAD).

Of course, there is the risk of losing all your money on the option if NEM sinks back to 20 and stays there.

At this point, I am holding, not buying. I averaged down on these calls and got some for about 4.6, on which I have almost tripled my money. I have also sold some (unfortunately) as they have risen, thinking I could buy them back cheaper. But so far, they have done almost nothing but go up (since January).

This is gambling, not investing.
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