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Strategies & Market Trends : Calls and Puts for Income
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From: Jerome11/13/2013 7:00:49 AM
1 Recommendation

Recommended By
Bocor

   of 5891
 
The cost of margin.....is it worth it?

Margin has its own hazards (margin call) but can also be a sound investment.

I use some margin and so I will use an example from my account.

Barrick Gold (ABX)...closed at 18.03 (my cost factor was 18.10). My margin cost is 7% annual.

So. $1810 x 7% = 126.70 per year divided by 12 months ='s $10.56 per month

ABX is also a very good covered call write.

Today I can write the Dec. 19's for $46.00 (minus commissions ='s $38.00)

This is the third month in a row I have written covered calls against ABX.

Unless something changes in the gold market I would expect ABX to trade between 18 and 21 a share..

This is not a big gain....but its decent monthly walking around money till I get called out.
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