2nd Quarter Loss from Call Options ....
First off:
I do not know what he real number will be but what follows is an approach that hopefully gets within the ballpark.
What I do know:
In Dec-05 - on the balance sheet we had
Unrealized losses on derivative contracts of $1,293,463.
In Mar-06 - on the balance sheet we had
Unrealized losses on derivative contracts of $1,427,226.
The difference (increase) between the two or $133,736
was booked to the P&L as
Other items
Unrealized losses on derivative contracts $133,736
============================
The important point to realize is as follows:
At the end of Quarter 2,
once they evaluate how much we have lost,
the amount we book to the P&L
is the difference between -
what we have already RESERVED on the Balance sheet
versus
the Required Reserve Balance based on the current
quarters calculation.
+++++++++++++
DEC 05
+++++++++++++
Here is my calc for the Dec-05 required reserve balance
needed on the balance sheet:
$513 Dec price of gold
$445 Option Strike Price
------------------------
$68 Loss per option
19,000 # of Options
------------------------
$1,292,000.00 Total Req. Reserve
==============================
The above approximates the real number of:
Unrealized losses on derivative contracts of $1,293,463.
Here is my calc for the Mar-06 required reserve balance
needed on the balance sheet:
+++++++++++++
MAR 06
+++++++++++++
$582 Mar price of gold
$480 Option Strike Price
------------------------
$102 Loss per Option
14,000 # of Options
------------------------
$1,428,000.00 Total Req. Reserve
==========================
The above approximates the real number of:
Unrealized losses on derivative contracts of $1,427,226.
Here is my calc for the Jun-06 required reserve balance
needed on the balance sheet:
+++++++++++++
Jun 06
+++++++++++++
$610 Avg price of gold for called Options
$480 Option Strike Price of called Options
------------------------
$130 Loss per Option
14,000 # of Options called
------------------------
$1,820,000.00 Tot Required Reseve
============================
Booked to June P&L:
--------------------------
$1,820,000.00 Tot Req. Reseve
Less:
$1,428,000.00 March 31 Reserve
-------------------------------
$392,000 Loss on Call Options
===============================
So I am gonna guess that the amount
is $400,000 and use this number
in my Excel P&L.
regards,
John
Balance Sheet
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