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Gold/Mining/Energy : Barrick Gold (ABX) -- Ignore unavailable to you. Want to Upgrade?

To: tyc:> who wrote (2606)	5/10/2002 12:26:43 AM
From: russet	Read Replies (3) \| Respond to of 3558

I'm afraid you have completely baffled me with your option lesson. If Barrick writes a call option at $310 strike price, they hope to collect the premium, and not have the counterparty exercise the option (that would likely only happen if the POG rose above the $310 + premium amount). When one option expires, they write another on the same oz of gold making multiple premiums off the same oz. This is what you do in a stable to declining market to make more money off your gold in the ground that makes you nothing if it just sits there. It increases the eventual amount they get for that oz of gold.