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Bullish on gold miners (GDX), Felix Zulauf - at the Barron's mid-year roundtable - suggests a...

Bullish on gold miners (GDX), Felix Zulauf - at the Barron's mid-year roundtable - suggests a speculative trade is in order given the beating the sector has taken. A purchase of December $30 calls partially financed with the sale of December $40 calls could be a 3 or 4-bagger with a moderate bounce in the index.
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  • 12429501
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    There is a reason the index has taken a beating. What they are selling (gold) is going down and if you think that the Miners will be more profitable with lower price of gold then the trade makes sense. Gold could of course go up and then the trade also would make sense. At status quo or falling gold prices the trade looks like a waste of money, especially when you are buying calls with a higher implied volatility than what you are funding (selling calls) it with.
    18 Jun 2013, 12:08 PM Reply Like
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