Beating Buy and Hold (thru disciplined speculation)

[Pixel8r]

TRADING THIS WAY- is LESS risky than Buy & Hold

 

 

What's dangerous about it?

 

I am doing VERY LOW RISK Trading, which is ungeared, and close to 80-100% long most of the time, backed up by large amounts of cash. (In fact, it is probably less risky trading than Buy&Hold since I am taking LESS PRICE RISK most of the time, and am also less exposed to physical storage risk.)

 

My main tactic is exploiting the flexibility inherent in using options, playing around with my positions "on the edges", but sticking with a solid core LONG position.

 

Have you really tried to understand these trades, and how I am using options?

No I have not tried to understand your trades, I just can't bring myself to even consider that options can be considered to be less risky than holding physical metal. I also explained that most people don't have large amounts of cash to play with and want to protect the little that they have.

 

You appear to missing my point completely, so I will lay it out for you again in as plain language as I can.

 

Physical gold held in your hand is no ones else's liability and is about the safest form of money you can get. We are in the middle of the largest financial crisis the world has ever seen, holding bits of paper that are someone else's liability is inherently unsafe during this time.

 

You must be able to understand what I am talking about here, don't you?

 

I tried to explain what I am talking about above in pointing to the recent Jim Rickards interview, where he mentions that he believes that the gold that has been leased from the US vaults is still in the vaults and the lease could be recalled at anytime. What would happen if you option got defaulted on, because the bank that was liable found themselves in trouble? I am not so sure Jim Rickards actually knows what he is talking about and think that if the US actually does have all the gold they are supposed to have they would agree to an audit. The point being that even if the US does have the gold it claims there are multiple claims to it in the banking system which shows the risk of unallocated paper claims to gold.

 

When it comes down to it there is a massive amount of paper gold that has been sold and a much smaller amount of physical, I would not want to be holding paper however rich it makes me feel. I completely realise that you are making more out of your paper trading of the metals and good luck to you, I have just been trying to show you that I think it is not for everyone to attempt and is in fact a riskier thing to do.

[fitkid]

No I have not tried to understand your trades, I just can't bring myself to even consider that options can be considered to be less risky than holding physical metal. I also explained that most people don't have large amounts of cash to play with and want to protect the little that they have.

 

You appear to missing my point completely, so I will lay it out for you again in as plain language as I can.

 

Physical gold held in your hand is no ones else's liability and is about the safest form of money you can get. We are in the middle of the largest financial crisis the world has ever seen, holding bits of paper that are someone else's liability is inherently unsafe during this time.

 

You must be able to understand what I am talking about here, don't you?

 

I tried to explain what I am talking about above in pointing to the recent Jim Rickards interview, where he mentions that he believes that the gold that has been leased from the US vaults is still in the vaults and the lease could be recalled at anytime. What would happen if you option got defaulted on, because the bank that was liable found themselves in trouble? I am not so sure Jim Rickards actually knows what he is talking about and think that if the US actually does have all the gold they are supposed to have they would agree to an audit. The point being that even if the US does have the gold it claims there are multiple claims to it in the banking system which shows the risk of unallocated paper claims to gold.

 

When it comes down to it there is a massive amount of paper gold that has been sold and a much smaller amount of physical, I would not want to be holding paper however rich it makes me feel. I completely realise that you are making more out of your paper trading of the metals and good luck to you, I have just been trying to show you that I think it is not for everyone to attempt and is in fact a riskier thing to do.

 

:lol:

 

 

http://www.youtube.com/watch?v=_yRi1gieDMw&feature=related

[drbubb]

No I have not tried to understand your trades, I just can't bring myself to even consider that options can be considered to be less risky than holding physical metal. I also explained that most people don't have large amounts of cash to play with and want to protect the little that they have.

 

You appear to missing my point completely, so I will lay it out for you again in as plain language as I can.

 

Physical gold held in your hand is no ones else's liability and is about the safest form of money you can get. We are in the middle of the largest financial crisis the world has ever seen, holding bits of paper that are someone else's liability is inherently unsafe during this time.

 

You must be able to understand what I am talking about here, don't you?

True, only until someone discovers you cache and takes it away - and that may be the government too.

Also, when you want to move in a hurry, you may have trouble taking your physical silver with you.

 

Your problem is that you simply fail to understand the inherent advantages of options, especially the low risk way that I am trading them.

With physical Silver: You have the WHOLE price risk, from $0, up to the current price

 

With options on SLV : I have only SOME of the price risk. That is: from the strike price, up to the current price, plus the time value on top. You can only lose what you pay for the option, however much the price might fall.

 

Why not have a look at some of the options I am trading, and see how I do it.

 

For example, if I buy a $34 October Call on SLV, and have $34 per share (SLV ounce) in the bank, then if prices fall below $34, I can write off the option, and I will still have the cash in the bank. If I want to, I can park my cash in another currency, like Norwegian Kroner, which just might be the safest currency in the world. Or I could have kept my cash in Swiss Francs, and made money (in US$) on both my options, and my cash.

 

If I am smart, and careful, I ought to be able to outperform Buy & Hold of physicals, as I have in fact been doing.

 

Don't let your (blind?) ignorance of Options blind you to their great value as a flexible trading and investing tool (!!)

[drbubb]

Okay,

Silver has dropped back fast, with SLV falling about 3%.

I have decided to add some Silver Calls

 

For the Alt.Portfolio #2, I buy:

 

/THE QUOTE/

SLV111022C34

SLV OCT 22 2011 34.00 CALL Refresh

Last [Tick] 4.85[-] Change -0.75

Volume 14 % Change -13.39

Open 4.88 Bid 4.70

Day High 4.90 Bid Size 12

Day Low 4.76 Ask 4.75

/UNQUOTE/

 

BOT: 2,000x Oct$34 calls at the offer price of $4.75, or $9,500

 

I think Silver may fall, but it is now on support, so it is worth picking up October calls, because that leaves plenty of time for the price to recover.

 

Please note: I sold 2,000 Aug.$34 Calls yesterday at $4.50 -so this is a sort of replacement, but with 8-9 weeks more life in them.

 

I now need to figure out what to do with the "original" replacement: the PAAS Sept.$25 Calls*

 

Longer dated SLV calls are a less risky replacement, which is why I jumped back into these.

== ==

 

*Actually, they jumped by almost $1 after I bought them at $4. I briefly had a sell order in, since that was a nice intraday profit, but I got cold feet and pulled it, because I thought some might think I was over-trading. They closed yesterday under $4, so I would have been wise to go ahead.

 

The PAAS Sept.$25 calls are now at $3.40-3.70, with PAAS at $27.34, so I could probably sell with a $0.50 loss. I don't think I need to do that, since they are now so cheap versus Silver prices. The SLV Aug. $34 calls are at $3.25-3.30, so they have fallen back by more than $1.20, so yesterday's swap has worked for me- I am better off having done the exchange.

 

HAVE A LOOK at the Detailed Portfolio: (as at last Friday's close)

https://spreadsheets1.google.com/spreadsheet/pub?hl=en_US&hl=en_US&key=0Am5S2YdB2ZxYdC1KcWgxVVpqamJhQl9zRmt2aEhPaUE&single=true&gid=0&output=html

[drbubb]

"I now need to figure out what to do with the "other" replacement: the PAAS Sept.$25 Calls*"

 

The PAAS Sept.$25 calls are now at $3.40-3.70, with PAAS at $27.34, so I could probably sell with a $0.50 loss. I don't think I need to do that, since they are now so cheap versus Silver prices. The SLV Aug. $34 calls are at $3.25-3.30, so they have fallen back by more than $1.20, so yesterday's swap has worked for me.

 

Detailed Portfolio:

https://spreadsheets1.google.com/spreadsheet/pub?hl=en_US&hl=en_US&key=0Am5S2YdB2ZxYdC1KcWgxVVpqamJhQl9zRmt2aEhPaUE&single=true&gid=0&output=html

I have decided to keep them for the time being, since I am currently holding in Alt-Port#2:

 

OPTIONS / BOT at .Qty. Now at: Value = profit

zsl:ag$12c $1.28 5,000 $2.62 $13,100 $6,700 (last Friday's prices)

zsl:ag$12c $1.28 5,000 $2.90 $14,500 $8,100 (today's prices)

 

And these ZSL Calls are equivalent to being short about 3,425 SLV shares, so they can "hedge" the risk on the PAAS calls

 

I hope the way I shuffle these positions around, and look at different way that the portfolio hedging can work SHOWS HOW I CAN EXPLOIT the flexibility inherent in options positions.

 

In edit:

Just SLD 2,000 ZSL $12 calls at $2.95 x 2,000 = $5,900

 

( That's a 130% profit, relative to my $1.28 cost - Nice ! )

 

I decided to take the profit since the options expire next Friday.

Until then, the remaining 3,000 ZSL calls should hedge the PAAS calls.

[Pixel8r]

True, only until someone discovers you cache and takes it away - and that may be the government too.

Also, when you want to move in a hurry, you may have trouble taking your physical silver with you.

The thing is that most of my physical silver is held with goldmoney, except for a small amount of SHTF coins. I see that as about the safest and best option, as it is allocated, audited and insured. I can leave the country and access my account from anywhere, even make payments via my mobile phone.

Your problem is that you simply fail to understand the inherent advantages of options, especially the low risk way that I am trading them.

 

Don't let your (blind?) ignorance of Options blind you to their great value as a flexible trading and investing tool (!!)

I can see the advantage of using options and I am sure I will investigate and possibly use them in the future, after this financial crisis is over. Currently the risk is too high for my liking, even owning shares in mining companies is worrying me at the moment.

 

BoA looks like it is about to go tits up, would that affect any of your options (I am unsure as to who backs options and how the chain of liability is with them)? I know in the 2008 crash I had some ETF's (I know better now) which where seriously affected by the meltdown in AIG, holding physical metal doesn't carry them same sort of risks.

[seekingclarity]

I respect the trading view & the hold view - both have merit.

However, many have a core holding & a percentage which is trading funds.

This will vary upon trading ability, strategy, time management etc.

Why does there always appear to be a bunfight over this?

LOL

[drbubb]

BoA looks like it is about to go tits up, would that affect any of your options (I am unsure as to who backs options and how the chain of liability is with them)? I know in the 2008 crash I had some ETF's (I know better now) which where seriously affected by the meltdown in AIG, holding physical metal doesn't carry them same sort of risks.

Almost certainly not.

BAC troubles are extremely unlikely to have any impact on my options,

and even if it did, I am only risking the money I have invested in options, which is a small part of the total portfolio.

 

The big lumps of the portfolio are in:

 

+ Cash held at an insured broker

+ SLV

+ Physical silver

 

You are exposed to the risks of Goldmoney and the strength of their storage arrangements, which is not the same thing as having the Silver in your physical possession. If some sort of Earth change or 911 event made the GM storage unit unaccessable, your wealth stored there might be lost. They cannot ship out what they cannot gain access to

 

When I start worrying about the safety of SLV and options, I can shift more to physical.

[drbubb]

I respect the trading view & the hold view - both have merit.

However, many have a core holding & a percentage which is trading funds.

This will vary upon trading ability, strategy, time management etc.

Why does there always appear to be a bunfight over this?

LOL

A handful of people here seem to be caught up in an attitude - a religious-like attitude - that physical is good, and any form of non-physical holding of Silver is bad.

 

They will not even look at the actual strategies I am employing to gain outperformance, and accept that there are low risk ways of trading options - They simply want to rubbish holding anything which is not physical metal. And they are in denial about the actual risks they are taking in physical - and especially the inherent price risk.

 

I am really bored by it too, and think it unfortunate that there is almost not discussion here of my actual trades, which are neatly beating the market, and beating Buy and Hold.

 

Instead of just talking about theoretical strategies, I am "walking the walk", and showing people what can actually be done.

[seekingclarity]

A handful of people here seem to be caught up in an attitude - a religious-like attitude - that physical is good, and any form of non-physical holding of Silver is bad.

 

They will not even look at the actual strategies I am employing to gain outperformance, and accept that there are low risk ways of trading options - They simply want to rubbish holding anything which is not physical metal. And they are in denial about the actual risks they are taking in physical - and especially the inherent price risk.

 

I am really bored by it too, and think it unfortunate that there is almost not discussion here of my actual trades, which are neatly beating the market, and beating Buy and Hold.

 

Instead of just talking about theoretical strategies, I am "walking the walk", and showing people what can actually be done.

 

This is what makes risk profile interesting..

Personally find your trades & rationale interesting but to be frank would not know how to implement all - this reflects your trading profile & my lack of experience with options etc.

Also, doubt whether the majority here have a clue of what you are doing per se, despite your setting them out here.

Maybe we could use a new thread "Bubbs Trading Skills for Dummies".

[drbubb]

This is what makes risk profile interesting..

Personally find your trades & rationale interesting but to be frank would not know how to implement all - this reflects your trading profile & my lack of experience with options etc.

Also, doubt whether the majority here have a clue of what you are doing per se, despite your setting them out here.

Maybe we could use a new thread "Bubbs Trading Skills for Dummies".

 

EXPLANATION #1 : Looking at the Big Picture, Options exposure

==============

 

To see clearly what I am doing, you have to click on this link:

https://spreadsheets1.google.com/spreadsheet/pub?hl=en_US&hl=en_US&key=0Am5S2YdB2ZxYdC1KcWgxVVpqamJhQl9zRmt2aEhPaUE&single=true&gid=0&output=html

 

It gives last Friday's valuations for the three portfolios. I will summarize it:

 

8/5/2011 : Buy&Hld Alt Port#1 Alt Port#2

Cash- in $ - - - None - $274,290 $368,965

Silver Oz. s 10,000 5,000 0.000

SLV - Sh. - - - None - 0.000 2,000

/ Value = = $383,300 $191,650 $75,220

Opt.Value - - - None - $59,160 $85,400

Eqy. Shs.+ - - - None - 10,000 10,000

Eqy.Value - - - None - $9,300 $9,300

Tot. Value $383,300 $534,400 $538,885

 

VALUATIONS

In B&H- : $383,300, that's 10,000 oz (AG-Silver) x $38.33

In AP#1 : $475,240, that's 5,000 oz.(AG) + SLV + Cash + Options

in AP#2 : $453,485, that's 0-AG + 2,000shs (SLV) + Cash + Options

 

The thing to realise is if my Options are went to zero, I would still have:

 

8/5/2011 : Buy&Hld Alt Port#1 Alt Port#2

Tot. Value $383,300 $534,400 $538,885

Opt.Value - - - None - $59,160 $85,400

Net. Value $383,300 $475,240 $453,485

 

Vs.Buy&H - - - None - $91,940 $70,185

 

In AP#1, I would be $91,940 ahead of Buy&Hold, and

in AP#2, I would be $70,185 ahead of B&H.

Obviously, my Options are hardly going to blow up the Portfolios.

 

In fact, I have long and short pointing option positions in both

AP1 and AP2, so if prices go up or down, there is some built-in hedging.

 

Does this help?

If you can understand what I have written in this post, you may find it

easier to understand what I am doing here.

[drbubb]

"Trading like a Monkey climbs..."

 

EXPLANATION #2 : If you were starting out today

==============

If you were starting out today, with a portfolio of 2,000 oz of AG-Silver,

you could split your portfolio into two parts, and run an experiment:

 

PORTFOLIOS

8/5/2011 : : Buy&Hld : New Port#1

Silver Oz. s 1,000 : 1,000

Tot. Value $38,330 : $38,330

 

Sell the 1,000 oz. in Port#1, and you will have $38,330 cash to work with.

 

You could do what I did yesterday, and Buy 10 contracts, 1,000 oz. worth

of Oct.$34 calls. I paid $4.75 early in the day. If you had waited until the close,

when SLV was $36.32, you could have paid: $4.40.

 

If you had done that trade, you would be left with:

 

8/5/2011 : : Buy&Hld : New Port#1

Silver Oz: 1,000 oz : --none--

Tot. Value $38,330 : =--none--

Cash === : -- none -- : $33,930

Oct $34c : -- none -- : $ 4,400 : that's 1,000 x $4.40

 

Now here's what can happen.

 

1) SLV can trade sideways (unlikely) for 2 1/2 months, and the Time Value

of the calls will melt away, and they will be worth only "Intrinsic Value".

That is the difference between SLV-$36.31 and the strike-$34, ie. $2.31.

Then, your New Port#1 would be worth a bit less than you B&H portfolio.

With now AG at $37.72, your B&H Portfolio would be worth $37,720.

And New-Port#1, would be worth cash + $2,310 = $36,240.

 

So, if you buy options, you are betting on some volatility.

Now I ask you: Is Silver Volatile? Of course. So let's see what happens

if prices make some big moves...

 

2) Silver can shoot up in price. Let's assume it goes to $50, and SLV to $49.

In that case, your portfolio will look like this:

 

Oct.2011 : : Buy&Hld : New Port#1

Silver/shs.: 1,000 oz : --none---

AG/SLV == : $50/ oz. : $49/ sh.

Tot. Value $50,000 : --none---

Cash === : -- none -- : $33,930

Oct $34c : -- none -- : $15,000 : that's 1,000 x $15.00

Overall= : $50,000 : $48,930

 

You will have lost a little value, but not much.

 

3) Silver can drop in price. Let's assume it goes to $30, and SLV to $29

 

Oct.2011 : : Buy&Hld : New Port#1

Silver/shs.: 1,000 oz : --none---

AG/SLV == : $30/ oz. : $49/ sh.

Tot. Value $30,000 : --none---

Cash === : -- none -- : $33,930

Oct $34c : -- none -- : -- none -- : the Calls are worthless

Overall= : $30,000 : $33,930

 

Owning Calls instead of being long physical Silver has mostly

protected you from a big drop, since your cash holds its value.

This is why I bought $34 calls, I can only lose the premium.*

 

4) Silver can be volatile, trading up & down, Down and up.

 

A more likely scenario is that Silver's price does not move in a straight line into the October expiry. Instead, it is likely to trade up and down; down and up. Ideally, I hope to extract profits from the volatility in the price, especially the moves down. How? I will not wait until maturity - I will adjust my position along the way. Let's take the example of a quick $5 drop in the Silver price. If that happens quickly, and SLV is at $31.31, then my $34 calls will be out of the money. They will still have value, because there will a fair amount of time left until the October expiry.

 

So what can I do?

 

I can do what I call "a reset", where I sell the Oct.$34 call (at maybe $2.00), and buy a lower strike Call, at say $30 (for maybe $3.90). That means I will dramatically improve my "upside breakeven" point, from the current level of $38.40 (that's the $34 strike, plus $4.40 cost) to a new level of $36.30 ($30 + $4.40 + $3.90 - $2.00.) That lower breakeven will be a good thing, if the Silver price subsequently rises.

 

I might also hold onto the Oct $34calls and buy new ones such as Jan $30 calls. This would increase the size of my overall Long position. They might cost about $4.30.

 

What I actually do, will depend on my market views at the time, and how I see support and resistance levels. It is managing well those "windows of opportunity" as they come, which will show my prowress as a trader. But all along the way, I must remain true to my Big Picture strategy and intention, which is: to beat Buy and Hold, while taking minimal amounts of actual price risk as I go.

 

 

== ==

*When I tell Pixel:

"Trading Options as I do, is less risky than owning physicals."

I mean: I am not exposing myself to the full price drop.

With a careful constructed and monitored options portfolio,

the price volatility can make me money.

 

I "trade like a monkey climbs." I do not take my hand off one branch,

until I have a tight grip on another branch. In other words, I never take

extreme lopsided risk.

Also: like a monkey, I know where I am on the tree -

I do not lose sight of the big picture.

[BradleyWong]

"Trading like a Monkey climbs..."

 

I "trade like a monkey climbs." I do not take my hand off one branch,

until I have a tight grip on another branch. In other words, I never take

extreme lopsided risk.

Also: like a monkey, I know where I am on the tree -

I do not lose sight of the big picture.

I like that.

But I have no idea what you actually mean.

 

What is your Big Picture view right now?

[drbubb]

I like that.

But I have no idea what you actually mean.

What is your Big Picture view right now?

The Big Picture? My long term Roadmap

 

When I started this thread, I thought that Silver would fall in an A-B-C correction, and I thought the ultimate (wave C) low might be something like $27-34.

 

I wanted to pick up enough "Longs" (ie: AG / SLV / SLV-calls) in wave A, so that if prices took off after that, I would be long 10,000 ounces, the same as the B&H portfolio had. Then I would try to make money, or at least outperform B&H, in the wave B down.

 

At the Wave C low, if that came as expected, then I would move to go long 14,000 -15,000 ounces (of AG / SLV / SLV-calls). This way, I would lock in permanent advantage relative to B&H, especially if I could buy those 14-15,000 ounces without using gearing, and always retain 10,000 AG-ounces or SLV-shares with cash on the side.

 

Where are we now?

 

I initially expected Wave C to finish in mid-July. That did not happen. I think a Wave C Low may still lie ahead. So I am trying to build a position which is at least 10,000 ounces long, but I want to have a sizeable part of my longs as SLV-Calls, so I can outperform as Silver falls again. (See Example 2, above)

 

I know that my view can be wrong, so I play it "defensively" protecting myself from sudden Silver price surges, by keeping a minimum amount of "silver upside" in my portfolio. I want to retain 10,000 ounces of upside at all times... But I am willing to use "proxies", even unusual ones, like calls on PAAS, as a part of my "upside". I may also use some Put protection (for my minimum upside) when the market looks "toppy."

 

("The Branch" is a minumum-sized Long position, of 10,000 oz, to match Buy & Hold.)

 

When I talk about "trading like a monkey climbs," I want most of my larger trading positions to be taken when I can enter a large trade with very low risk. For instance, if I was long 10,000 ounces and sitting with a big lump of cash when AG slides into the $27-34 price range in wave C, then I can gradually add to my position, buying more ounces as AG falls towards the lower end of that range. If I do that without any gearing, then I am never exposed to the risk of being forced to trade out of my options at the wrong time. I remain safe, just like the monkey who always has a firm grasp on a branch.

 

On the other hand, if Silver shoots up to near what I think is the "top of the range", then I will sell down my excessive longs, or buy puts on things like SLV, or acquire "downside" by purchasing calls on ZLS. This way, if Silver shoots up, and blows through the top of the range, I remain safely long a 10,000 ounce position.

 

Does this help?

[drbubb]

THE PAAS / SLV SWAP, how's it going ?

& and the ZSL Calls vs. SLV Puts

======================================

 

... Monday's trades: Aug.SLV.$34calls vs. Sep.PAAS.$25 calls

======

+ BOT 2,000 Sept.$25 Calls at $4.00 (with PAAS at $28.15)

+ SOLD 2,000 Aug.$34 Calls at $4.50 (with SLV at $38.40)

original trade:

paas $28.15 / $25c : $4.00 x 2,000 = $ 8,000 : R:72.3%

slv : $38.90 / $34c : $4.50 x 2,000 = $ 9,000 (112.5%)

Update

paas $28.79 / $25c : $4.25 x 2,000 = $ 8,500 : R:79.3%

slv : $36.32 / $34c : $4.20 x 2,000 = $ 8,400 ( 98.8%)

 

... An earlier trade compares ZSL Calls (Aug$12c) with SLV Puts (Aug$41p)

======

original trade:

zsl: $13.40 / $12c : $1.70 x 5,000 = $ 8,500

slv: $39.00 / $41p : $2.65 x 3,435 = $ 9,103 (107.1%)

wed 08/03:

zsl: $12.30 -$0.52 (-4.23%) / $12c : $1.00 x 5,000 = $ 5,000

slv: $40.55 +$0.73 (+1.83%) / $41p : $1.65 x 3,435 = $ 5,668 (113.4%)

thu 08/04:

zsl: $14.08 +$1.78 (14.47%) / $12c : $2.40 x 5,000 = $12,000

slv: $37.61 -$2.91 (-7.25%) / $41p : $3.80 x 3,435 = $13,053 (108.8%)

fri 08/05:

zsl: $14.33 +$0.25 (+1.78%) / $12c : $2.62 x 5,000 = $13,100

slv: $37.32 -$0.29 (-0.77%) / $41p : $4.05 x 3,435 = $13,912 (106.2%)

. . .

Update

zsl: $15.05 +$1.18 (+8.51%) / $12c : $3.05 x 5,000 = $15,250

slv: $36.32 -$1.65 (-4.35%) / $41p : $4.67 x 3,435 = $16,041 (105.2%)

[drbubb]

HERE's your WARNING, friends...

 

A Gold Top looks immanent

- maybe one more peak, or we may have seen it already

 

Very simply... GOLD is hanging up there, "all by its lonesome"

 

Copper is way down ... CU-vs-GLD

 

Oil is way down .. ... OILB-vs-GLD : OIH-vs-GLD

Silver has failed to climb to those old highs ... SLV-vs-GLD

Gold stocks are some way off their highs too ... GDX-vs-GLD

 

So how much longer can Gold levitate?

 

Switching some Gold to SLV calls, may make great sense here

Look at what happened back in 2008:

=====

Gold peaked after Copper, FCX, and GDX (Gold stocks)

 

 

Compare that, with what we see now:

Gold (GLD) versus Gold stocks (GDX), Copper (CU) & FCX ... update

 

 

Another interesting comparison, is with the Silver peak earlier this year

 

Silver (SLV) versus Silver stocks (SIL) and FCX and Copper (CU) ... update

 

 

If Gold peaks out in the same way as Silver did, after a brief pullback (another day or two perhaps?), then Gold will shoot up and test the high - And that will be it !

 

I cannot promise it will happen that way, but I will be watching for it.

[drbubb]

SLV: Last [Tick] $38.07

Change +$1.75 / % Change 4.82%

 

SLV could trade up to $38.40-38.50

I am leaving an order in to:

SELL 1,000 x Jan.$27 call at $12.20 (P-Alt.#2)

 

I picked up those "extra" Oct.$34 calls, and so I can do this.

 

I am thinking of parking some of the Cash in NKR : NKR-chart

 

USD = 5.5 NKR

[drbubb]

"I now need to figure out what to do with the "other" replacement: the PAAS Sept.$25 Calls*"

SOLD half of them just now...

 

Status Filled at $4.90

Symbol -PAAS110917C25

Description CALL (PAAS) PAN AMERICAN SILVER SEP 17 11 $25 (100 SHS)

Action Sell to Close Call

That's

SOLD: PAAS Sep$25c 1,000 x $4.90 = $4,900

: a profit, rather than the loss I was initially expecting

[sine270]

HERE's your WARNING, friends...

 

A Gold Top looks immanent

- maybe one more peak, or we may have seen it already

 

 

Look at what happened back in 2008:

=====

Gold peaked after Copper, FCX, and GDX (Gold stocks)

 

Another interesting comparison, is with the Silver peak earlier this year

 

 

If Gold peaks out in the same way as Silver did, after a brief pullback (another day or two perhaps?), then Gold will shoot up and test the high - And that will be it !

 

I cannot promise it will happen that way, but I will be watching for it.

 

Lets not forget that silver was up somewhere in the region of 150% in the year before it crashed. Gold is now up only about 50%. Still a lot of course but no where near that of Silver. Silver still up over 100% BTW.

[drbubb]

Lets not forget that silver was up somewhere in the region of 150% in the year before it crashed. Gold is now up only about 50%. Still a lot of course but no where near that of Silver. Silver still up over 100% BTW.

That is true. But Silver has always been more volatile than gold and Gold is now into a parabolic move, which is the important factor.

 

I is virtually impossible to call an exact top, but if we have similar timing as prior tops, then I would say that it will come before / or on options expiry next friday. That is only a historical comparison, and not a genuine prediction, and is certainly not something I can guarantee.

 

The current upmove did not end yesterday - it is still undeway. I would like to see a brief pullback of more than a few hours, before a run to a final high - if Gold is to mimick the action of silver at its recent high.

[sine270]

That is true. But Silver has always been more volatile than gold and Gold is now into a parabolic move, which is the important factor.

 

I is virtually impossible to call an exact top, but if we have similar timing as prior tops, then I would say that it will come before / or on options expiry next friday. That is only a historical comparison, and not a genuine prediction, and is certainly not something I can guarantee.

 

The current upmove did not end yesterday - it is still undeway. I would like to see a brief pullback of more than a few hours, before a run to a final high - if Gold is to mimick the action of silver at its recent high.

 

As you say, it does look very toppy but maybe it is different this time. Some are saying its the start of the final phase so it could be a very dangerous time to sell out with the intention of buying back in lower. If the public start buying gold then it could go seriously higher from here. Alternatively we could be some way off that but who knows. I wouldn't take the risk and am happy I've always stuck to buy and hold. Now up 400% on those first coins when you first started posting about gold.

[drbubb]

SLV: Last [Tick] $38.07

Change +$1.75 / % Change 4.82%

SLV could trade up to $38.40-38.50

And so it did...

 

SLV: $38.444[-]

Change $2.1240 / % Change 5.85%

Bid $38.3100 - Ask $38.3400

Open $37.40 / Day High $38.52 / Day Low $37.17

Volume 50,217,241

[drbubb]

As you say, it does look very toppy but maybe it is different this time. Some are saying its the start of the final phase so it could be a very dangerous time to sell out with the intention of buying back in lower. If the public start buying gold then it could go seriously higher from here. Alternatively we could be some way off that but who knows. I wouldn't take the risk and am happy I've always stuck to buy and hold. Now up 400% on those first coins when you first started posting about gold.

What I am suggesting, is to sell some Gold and buy SLV calls, and maybe calls on Gold stocks

 

At these gold prices the profits of the Gold miners are going to be spectacular...

 

EXAMPLE:

Jaguar Mining Reports Strong Quarterly Profit, Record Cash Operating Margin in Q2 2011

Aug. 10, 2011

 

Q2 2011 Highlights

 

Net income of $15.6 million or $0.18 per basic and fully diluted share.

Cash from operating activities generated a total of $21.7 million or $0.26 per basic and fully diluted share, an increase of $19.7 million from Q2 2010.

Record revenue of $60.6 million, an increase of 64% from Q2 2010.

Gold production of 40,257 ounces, an increase of 32% from Q2 2010.

Record gold ounces sold totaled 40,184, an increase of 31% from Q2 2010.

Record cash operating margin per ounce of gold of $708, an increase of 55% from Q2 2010.

EBITDA of $33.1 million, an increase of $34.7 million from Q2 2010.

 

CONCORD, NH, Aug. 10, 2011 /CNW/ - Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX: JAG) (NYSE: JAG) today reported a net income of $15.6 million or $0.18 per basic and fully diluted share for the quarter ended June 30, 2011. The income was generated from gold sales of $60.6 million, a quarterly record for the Company. Cash generated from operating activities during the quarter totaled $21.7 million or $0.26 per basic and diluted share. These results compare favorably to gold sales of $36.9 million, a net loss of $14.2 million and cash generated from operating activities of $2.0 million as reported in Q2 2010.

 

Commenting on the Q2 2011 results, Daniel R. Titcomb, Jaguar's President and CEO stated, "We are pleased to report strong results with a number of records for the quarter. We are continuing to see the positive impact of the team's focused effort to improve and expand our operations. There is more work to be done to realize our growth potential and maximize shareholder value. However, this quarter is another indication that we are headed in the right direction with improvement in all of the major operating areas."

 

The Company's operations produced 40,257 ounces of gold during the quarter, an increase of 32% compared to Q2 2010. The increase was driven largely by the addition of the Caeté operation which was commissioned in Q3 2010. Nearing the end of Q2 2011, the Caeté operation experienced a mechanical issue in its mill which resulted in an extended shut-down to perform necessary maintenance and repairs, successfully completed in early July.

 

As gold prices in world markets continued to increase, Jaguar was able to sell a record 40,184 ounces during Q2 2011 at a record average realization of $1,507 per ounce. The increased realization per ounce more than offset the increase in average cash operating cost, leading to a record cash operating margin of $708 per ounce. Average cash operating cost for the quarter was $799 per ounce compared to $746 per ounce in Q2 2010 (see Non-IFRS Performance Measures in the accompanying tables). The cost increase was driven largely by a combination of continuing adverse exchange rates, the temporary shut-down of the Caeté mill and general cost inflation for labor and mining supplies.

 

Read more: http://www.digitaljournal.com/pr/388525#ixzz1UfPBxhj8

 

The revenues are so high that no one will mind the JUMP in operating expenses

[sine270]

What I am suggesting, is to sell some Gold and buy SLV calls, and maybe calls on Gold stocks

 

At these gold prices the profits of the Gold miners are going to be spectacular...

 

EXAMPLE:

Jaguar Mining Reports Strong Quarterly Profit, Record Cash Operating Margin in Q2 2011

Aug. 10, 2011

 

Q2 2011 Highlights

 

Net income of $15.6 million or $0.18 per basic and fully diluted share.

Cash from operating activities generated a total of $21.7 million or $0.26 per basic and fully diluted share, an increase of $19.7 million from Q2 2010.

Record revenue of $60.6 million, an increase of 64% from Q2 2010.

Gold production of 40,257 ounces, an increase of 32% from Q2 2010.

Record gold ounces sold totaled 40,184, an increase of 31% from Q2 2010.

Record cash operating margin per ounce of gold of $708, an increase of 55% from Q2 2010.

EBITDA of $33.1 million, an increase of $34.7 million from Q2 2010.

 

CONCORD, NH, Aug. 10, 2011 /CNW/ - Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX: JAG) (NYSE: JAG) today reported a net income of $15.6 million or $0.18 per basic and fully diluted share for the quarter ended June 30, 2011. The income was generated from gold sales of $60.6 million, a quarterly record for the Company. Cash generated from operating activities during the quarter totaled $21.7 million or $0.26 per basic and diluted share. These results compare favorably to gold sales of $36.9 million, a net loss of $14.2 million and cash generated from operating activities of $2.0 million as reported in Q2 2010.

 

Commenting on the Q2 2011 results, Daniel R. Titcomb, Jaguar's President and CEO stated, "We are pleased to report strong results with a number of records for the quarter. We are continuing to see the positive impact of the team's focused effort to improve and expand our operations. There is more work to be done to realize our growth potential and maximize shareholder value. However, this quarter is another indication that we are headed in the right direction with improvement in all of the major operating areas."

 

The Company's operations produced 40,257 ounces of gold during the quarter, an increase of 32% compared to Q2 2010. The increase was driven largely by the addition of the Caeté operation which was commissioned in Q3 2010. Nearing the end of Q2 2011, the Caeté operation experienced a mechanical issue in its mill which resulted in an extended shut-down to perform necessary maintenance and repairs, successfully completed in early July.

 

As gold prices in world markets continued to increase, Jaguar was able to sell a record 40,184 ounces during Q2 2011 at a record average realization of $1,507 per ounce. The increased realization per ounce more than offset the increase in average cash operating cost, leading to a record cash operating margin of $708 per ounce. Average cash operating cost for the quarter was $799 per ounce compared to $746 per ounce in Q2 2010 (see Non-IFRS Performance Measures in the accompanying tables). The cost increase was driven largely by a combination of continuing adverse exchange rates, the temporary shut-down of the Caeté mill and general cost inflation for labor and mining supplies.

 

Read more: http://www.digitaljournal.com/pr/388525#ixzz1UfPBxhj8

 

The revenues are so high that no one will mind the JUMP in operating expenses

 

Interesting. Pity I have absolutely no idea how to take advantage of it. Could buy some FTSE miners I suppose.

[drbubb]

Interesting. Pity I have absolutely no idea how to take advantage of it. Could buy some FTSE miners I suppose.

???

Buy a Gold producer, or Call options on a Gold producer,

that is making money

 

I like ASA