Dutch Central Bank Sale Announcement Imminent? Message Board

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Politics : Dutch Central Bank Sale Announcement Imminent?

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To: Bill Murphy who wrote (3058)	1/13/1999 10:09:00 PM
From: ForYourEyesOnly	Read Replies (1) of 81831

Gold Calls: They really are pushing hard on gold......can't wait until payback time! I'm currently trying to figure out where to do further allocation of $.....gold calls are cheap......but so are gold mining shares (esp juniors!).......I'd really prefer to buy more silver calls, but they have gone up quite a bit.... Wait for lower IV on the silver calls & POS drop closer to $5 to buy more...... Buy the gold calls while cheap (now) Pick up some more dirt cheap juniors.. Any thoughts? The Dec 99 $390 gold calls still don't make sense to me....the $330 @ $3.00 seem to be a much better bet than $390 @ $0.70. The $390 would only make sense if gold goes much higher than $400 and in an extremely volitile way......in most other situations, the $330 or so would offer better profits & risk/rewards, would it not? Comparison of values of (excluding time value) 1 $330 call @ $3 vs. 4 $390 calls @$0.70 (values are minus the cost of the calls) POG $350 $330 call = $1700 $390 call = $0 POG $400 $330 call = $6,700 $390 call = $$720 POG $450 $330 call = $11,700 $390 call = $5,720 POG $500 $330 call = $16,700 $390 call = $10,720 POG $600 $330 call = $29,700 $390 call = $83,720 So, the only scenario in which the $390 calls make sense is one in which the POG: Appreciates wildly *Appreciates with such volatility that the $330 call buyer cannot buy additional OTM options to pyramid at a reasonable price due to extreme volatility/lack of call sellers Is our call buyer an insider who knows that the POG will explode wildly, or Y2K extremists making a disadvantageous bet on the POG? Thanks! THC

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