• "Spreading the ideas of freedom loving people on matters regarding metals, finance, politics, government and many other topics"

Options trading strategies for stacking mining shares and/or yield.

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
Smaller miners seem to be catching another decent bid today. As they should with inflation at an acknowledged 40 year high.

Fortuna also had some positive production news.

 

solarion

Midas Member
Midas Member
Midas Supporter
Joined
Nov 25, 2013
Messages
11,536
Reaction score
21,027
Yep, pretty much all the commodity producers are screaming higher today. My top performers ATM are GATO, CDE, EXK, and HL...all up around 6.5% and FSM up around 4.5%.

My fire sale EXK calls are of the May20'22 strike 5 variety, so I'm going to look to roll them out to August...if I can do so cost effectively. They're in the money now, but there's not a whole bunch of profit there yet, so I'm going to give the trade a bit more time to cook.

Rolling out to August'22 strike 7.5 calls while collecting 0.35 credit on each sounds like the way to go. That'd lower my cost basis to 0.19 each and still leave significant upside potential and time to get there.
 
Last edited:

solarion

Midas Member
Midas Member
Midas Supporter
Joined
Nov 25, 2013
Messages
11,536
Reaction score
21,027
Sure enough...there's the earnings miss by JPM. Couldn't happen to a worse bunch of scumbags. Please go and get real jobs doing something useful career criminals.

1649848390367.png


Hopefully this sets a precedent for the rest of the crooked US financial sector...particularly those in the XLF...which I'm short.
 

solarion

Midas Member
Midas Member
Midas Supporter
Joined
Nov 25, 2013
Messages
11,536
Reaction score
21,027
Stacked also 2xQID July15'22 strike 21 calls on weakness today.

QID is a triple short nasdaq 100 fund. I fail to see why anyone is buying overpriced growth crap in this environment. I guess some may be conflating "slightly less overpriced" with "cheap", but I believe high flying tech has a long way to fall.

1649875585764.png
 
Last edited:

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
I see that WPM chart looking great now and should be paying another dividend in May. I might look to sell a farther OTM call on that position to increase the return. But not now.

Anyway, they announced another stream purchase with Generation Mining. Know anything about them? Stock chart looks good. I was interested because this looks like a local PALLADIUM play. Pa-Cu-Pt to be specific. Nice, project has a feasibilty study with a 30% IRR. Pretty nice.


Yea, after looking at the Presentation it looks good. Those are bonanza grade Pd drill returns. Also, there is no damn premium for WPM, dang, I am way to used to the meme stock IV.. LOL
 
Last edited:

solarion

Midas Member
Midas Member
Midas Supporter
Joined
Nov 25, 2013
Messages
11,536
Reaction score
21,027
I've a few hundred shares of generation mining(GENM/GENMF)...as I suspect it will be taken over eventually by a PGM major. They're building out one of the richest and lowest cost PGM mines of recent decades.

At this time Sibanye-Stillwater owns 32.8m shares(18.24%) of the company, making them the largest shareholder followed by Levy and Knoll(the president and executive chair). For these reasons I think the shares will be very stable.


 

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
Got my BBBY Bull Call Spread today for a Net Debit of $1.25 (total cost like $378). Got the Aug $34 calls and sold the highest strike Aug $45 calls. So the total width is $11 bucks and only paid about 11% but this is a low probability play.

The sold Put spread is expiring in 9 days and would like to close out but hasn't quite hit my bid. They do report earnings next week Wed.

I did have to roll this put spread forward as it expires tomorrow and the sold side ITM. It was the $20-$15 spread. But I rolled it forward in a somewhat complicated 4 leg trade but ended up with a small $35 credit for the effort. So even though the trade went against me I'll be fine as I doubt the stock stays down long.
 

solarion

Midas Member
Midas Member
Midas Supporter
Joined
Nov 25, 2013
Messages
11,536
Reaction score
21,027

Despite the mainstream narrative giving lip service to the notion that price inflation is "peaking", the reality is that it's still rising as evidenced by the forward looking PPI.

1649941004553.png


In fact the economic data all week has been abysmal, yet the broader markets rally...even though the mantra is "don't fight the fed" and the fed is actually withdrawing liquidity and raising rates. I guess people want to "fight the fed" and reality after all.

1649941202024.png
 

solarion

Midas Member
Midas Member
Midas Supporter
Joined
Nov 25, 2013
Messages
11,536
Reaction score
21,027
Liking on HYMC leaps in here. The price seems to be consolidating at higher levels and will likely head higher with higher metals prices and/or more positive press. I've slowly taken profits on my Nov18'22 strike 2 calls to the point that I'm now down to 12 remaining.

By way of moving back in at these seemingly settled prices, I've chosen to stack 4xJan19 2024 strike 3 LEAPs for 1.05 apiece. That's a lot of time for things to happen and I like the odds there. I may also look into selling some puts...May'22 2.5 strike puts make the most sense if I could collect .75-.80 in credit for doing so.

1649950392556.png
 

Au-myn

Goldbug
Founding Member
Site Supporter
GIM Hall Of Fame
Joined
Jul 2, 2010
Messages
1,317
Reaction score
2,494
Location
California
By way of moving back in at these seemingly settled prices, I've chosen to stack 4xJan19 2024 strike 3 LEAPs for 1.05 apiece.
Interesting, solarian.

The 2 LEAP CALLS @ 1.10 look tempting as well.
 

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
I'm telling you GME is about to go bonkers. AMC and BBBY will get dragged along. BBBY could surpass depending on what RC has planned and announces.

HYMC still looks decent but it really is one of those mines that must have much higher prices.

I'm not sure about that Call though. You are only getting 2:1 leverage and paying almost all premium. Why not just buy the shares?
 

solarion

Midas Member
Midas Member
Midas Supporter
Joined
Nov 25, 2013
Messages
11,536
Reaction score
21,027
Interesting, solarian.

The 2 LEAP CALLS @ 1.10 look tempting as well.
Agreed, they're both compelling.

I'm telling you GME is about to go bonkers. AMC and BBBY will get dragged along. BBBY could surpass depending on what RC has planned and announces.

HYMC still looks decent but it really is one of those mines that must have much higher prices.
I don't know how to value GME aside from the obvious...it goes up because people buy it knowing it's a dying business model because they want to "stick it to the man". Trailing PE is -30x while HYMC's is -4.8x. Clearly these PE metrics are meaningless as they're both losing money. However, if we're talking about future potential, one of them is sitting on a bunch of admittedly high recovery cost gold and silver and the other is sitting on a bunch of devaluing video game inventory. Which of these assets are likely to climb rapidly in value in a high/hyper inflationary environment?
 

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
Agreed, they're both compelling.


I don't know how to value GME aside from the obvious...it goes up because people buy it knowing it's a dying business model because they want to "stick it to the man". Trailing PE is -30x while HYMC's is -4.8x. Clearly these PE metrics are meaningless as they're both losing money. However, if we're talking about future potential, one of them is sitting on a bunch of admittedly high recovery cost gold and silver and the other is sitting on a bunch of devaluing video game inventory. Which of these assets are likely to climb rapidly in value in a high/hyper inflationary environment?

GME is not a value play. Just look at the charts, its a clear technical buy. Good for some and avoid for others. Fully understand. Just giving out the head's up.
 
Last edited:

solarion

Midas Member
Midas Member
Midas Supporter
Joined
Nov 25, 2013
Messages
11,536
Reaction score
21,027
Just find it difficult to understand when valuations matter for one company and not for another.

I sold 2xHYMC May20'22 2.5 strike puts for 0.75 in credit apiece. So who knows, maybe 36 days from now(or sooner), I may be forced to buy 200 shares for $350. ...oh the horror!
 

Au-myn

Goldbug
Founding Member
Site Supporter
GIM Hall Of Fame
Joined
Jul 2, 2010
Messages
1,317
Reaction score
2,494
Location
California
GME is not a value play. Just look at the charts, its a clear technical buy. Good for some and and avoid for others. Fully understand. Just giving out the head's up.
Nice breakout! I tightened up the scale from Traditional to a more LT snapshot at 3 x 2.5 scale.

gme1.png
 

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
I like the sold Puts option on HYMC better than buying a call. In fact, just tried it myself. But I went farther out in time for more premium. Bid to Sell the Nov $2 Puts. This last traded at 42% of the risk. So in other words I could be paid $255 upfront to buy $600 worth of HYMC. My buy price would be ~$1.15 which is where I tried to buy before but just missed my price.
 

solarion

Midas Member
Midas Member
Midas Supporter
Joined
Nov 25, 2013
Messages
11,536
Reaction score
21,027
Nice. I like the theta decay rapidly eating away at what I just sold. lol I've some theta decay of my own to offset anyway, so this should help a bit.

Plus HYMC has been pretty tame for awhile now...it should break one way or another within the next month or so. Selling puts is a pretty boss way to roll though.
 

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
Miners started strong today. The large caps still seem to be leading and that is expected / institutional money. Goldfields, GFI, is up 8% today with no apparent news that I can find. Something going on there. I don't hold options here but I do own some DRS shares as they had some direct investment options through Computershare.

HYMC trading more with the meme stocks, ie being controlled by the algos. But still has some extra support from Au and Ag prices.
 

Mujahideen

Owner Operator
Midas Member
Site Supporter
Survivor
Joined
Mar 31, 2010
Messages
15,137
Reaction score
31,074
Location
OTR
Just realized something while putting a whole lot of money on $RIOT in order to average things down and make it all work.

If you sell covered calls above your average cost, and sell cash secured puts below your average cost, eventually you will get exercised above your cost basis on a call; just a matter of time unless the stock goes bankrupt.

When a big drop happens, I buy more shares outright and average down. It’s kind of weird wanting a stock I’m invested in to go lower lol, but I think it will be ok in the long term.

I’m selling a calls quite a few strikes out because I want to keep my shares until it gets back around 25+ And I’ll sell a few cash secured puts at the money, and a lot more below that.

Pretty much short of riot going bankrupt, I’m lowering my cost basis or selling at a good profit.

I’m thinking this is more safe on an ETF because it exposed to more companies. I might try this with SLV, if I had more money, I’d try it with $qqq.

The stocks I have are on margin I think that’s the most profitable way to sell calls since the interest rate is low.
 
Last edited:

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
I don't think SLV gives you much diversification. But I could see that with GDX or GDXJ. Man, that was a rough week. 6 weeks of breaking out and up trends on GDXJ all knocked back in 1 week. For no real apparent reason other than the Fed is raising rates, which we've known for a while.
 

Mujahideen

Owner Operator
Midas Member
Site Supporter
Survivor
Joined
Mar 31, 2010
Messages
15,137
Reaction score
31,074
Location
OTR
That’s very interesting. It’s at the right price for me to do my strategy & the calls are paying a good amount. Margin requirement is better too. I’ll look into both of those.

Thanks.
 

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
Getting hammered today. Not a great time for leveraged options. EXK down 10% on low volume. Just more shysters trying to save their game.
 

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
Found a new brokerage that I might give a try to trade these complex options and perhaps some other stocks. I do not know how they get paid (ie payment for order flow) or routing options but might be worth a try.

Tastyworks.
 

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
Ok, well its been awhile for this thread. Not sure where Sol went but maybe he took a remote island vacation.

Anyway I did open the new account and have been playing around with fancier trades. And watching the pros trade there. I made some money on a recent credit spread on DAL. I also bought an ITM Leap on EPD and GFI (after the AUY announcement destruction). Today I opened a complex RCL bearish trade.

I sold a combined Credit spread -1 July 15 $55 Call (was ITM as it was around $55.60) and bought the 1 July 15 $60 Call. I used that to buy a longer term OTM Put Spread which I think was the 1 Sep $45 Put and sold a -1 $35 Put against that (so a debit put spread). All for a net credit of 50 cents. It did require like $400 buying power.
 

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
Ok, well its been awhile for this thread. Not sure where Sol went but maybe he took a remote island vacation.

Anyway I did open the new account and have been playing around with fancier trades. And watching the pros trade there. I made some money on a recent credit spread on DAL. I also bought an ITM Leap on EPD and GFI (after the AUY announcement destruction). Today I opened a complex RCL bearish trade.

I sold a combined Credit spread -1 July 15 $55 Call (was ITM as it was around $55.60) and bought the 1 July 15 $60 Call. I used that to buy a longer term OTM Put Spread which I think was the 1 Sep $45 Put and sold a -1 $35 Put against that (so a debit put spread). All for a net credit of 50 cents. It did require like $400 buying power.

Well this new RCL trade is working pretty well as the stock has resumed it's plunge. I closed the Call portion out Friday morning (had an order in that I couldn't change or could have done better). It closed at 0.83 debit. (had a target gain of 60% of the 2.22 credit = 0.89). A gain of $139 in a week or so and no upfront money (other than margin available). Almost made the trade free as the Put debit spread cost 1.72. That has also done well of course as well with the plunge this week. Max profit on the Debit spread is $828. I'm gonna go for 80% profit ($662.40) on this one so my target sell price is....(just thinking out loud here to place an order). Hmm.. $8.34. Is that right? I think I would have done better sticking with July for the Put spread as well but did not necessarily anticipate the coming plunge resuming so quickly. So I'm in no rush to close yet.

$8.34 was not correct as I forgot the purchase amount. Adjusted to the $6.65. Getting close but time value should shrink now.
 
Last edited:

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
Thank goodness for my RCL puts. Hope someone joined me for this plunge. I did sell 2/3 of my puts and cover half of my shares short today. Not sure if my put spread order filled.

1655405576945.png
 

Jodster

Always wrong
Silver Miner
Survivor
Joined
Apr 4, 2010
Messages
2,290
Reaction score
3,245
Thank goodness for my RCL puts. Hope someone joined me for this plunge. I did sell 2/3 of my puts and cover half of my shares short today. Not sure if my put spread order filled.

View attachment 264034
You’re doing well young man. Wish I knew what in the hell you were talking about.
 

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
Man I just added it up and did better than I thought on RCL. Screw meme stocks, PM's, Spacs and all. I covered the rest of my shorts and open puts today on RCL.

Total gain was like 12k. :2 thumbs up: Too bad it just covered mostly loses on those others.

Bought mostly $65 June or Sep Puts at the end of March when it was around $85. Covered around $35. The nice thing about drops is that they are more violent than bull markets.
 

Voodoo

Midas Member
Midas Member
Sr Site Supporter
Platinum Bling
Joined
Mar 31, 2010
Messages
7,578
Reaction score
12,587
Location
Deep Underground Bunker
So Solorain disappeared on April 14... Hmm He just about top ticked the miners high. Something of which to take note I think.