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

[Jodster]

Perhaps a snapshot taken before the Russian stock market closed? I recognize the 1st, 3rd, and 10th largest holdings of the RSX in that list. RSX is still trading and presumably the NAV is being set based upon futures. If I had any, I'd be finding out how that could be so I don't get a surprise 25% haircut when trading resumes in Russia.

First pic is one month ERUS vs. RSX . . . They're basically the same chart.

Second pic is 15 day ERUS. I dipped a toe in at $30. Started averaging in between $19.60 - $18.80. I'm about half invested at this point.
Thoughts?

 

[solarion]

It's easy to see where the correlation comes from when peering at the holdings of the two ETF offerings.

ERUS is potentially more heavily weighted into financials and communication than is RSX, but that's just what a get from a cursory look at it. That may also be a good or bad thing to you depending on your view of those sectors with regard to risk. It also has a lower yield(due to a higher NAV), than does RSX while management fee differences are a wash.

I imagine with the continuing and potential expansion of hostilities this morning, both ETFs will see further downside, but if/when cooler heads prevail, I'd expect both of these ETFs to recover vigorously as buyers hold their collective noses and wade in.

On another topic, I noticed with some amusement that the swap dealers seem to be rapidly covering their silver short positions...as expected. To the point now where those positions are nearly non-existent, at least according to scraped COT data, collected by the corrupt captured CFTC. While there's no real evidence here(yet) that they're moving to the long side, I suspect that will happen if inflationary forces persist.

It may prove informative to examine the swap's positioning with regard to yellow metal as well, and I'll have to look into that as also. I suspect most of the big banks weren't foolish enough to get caught on the wrong side of the geopolitical fire cracker transpiring in Ukraine though.

In other...other news, there's another spike in the VIX this morning which pushes it firmly into "danger" territory where automated re-balancing occurs for many guaranteed return products. Meaning they dump equities and buy debt. The chart there shows a clear progression of higher lows and higher highs since bottoming in November? of 2021. Now we're at levels on the VIX not seen since Feb of 2021.

Pre-market...SILJ is moving(+1.78%), GDX(+.90%), GDXJ(+1.07%) and SIL remains unchanged. It'll be interesting to see how much more pain SIL will endure due to the Russian exposure(Polymetal), before heading higher with the underlying PMs.

As you can see, SIL is underperforming the other PM ETFs since the bottom in late January/Early Feb. SIL has fallen about 9% in the past week, while the others have basically traded sideways.

 

[solarion]

Silver very clearly took over at driving the PM bull bus this morning...forcing the GSR lower by .9% at this point. While they're just rumors, to be taken with a grain of salt, some are saying the crimex is soft defaulting on March silver deliveries. The non-rumor, confirmable part of that is that, they're behaving extremely creepy with March silver contract deliveries. I checked a bit ago and of the 8555 contracts left standing for delivery at Friday's bell, there'd only been a bit over 4k marked as delivered...with 996 delivered on Friday. This is unusual behavior as huge chunks(80%+) of those deliveries are usually done by close of business on options expiry.

Not sure what's going on, but it may be contributing to strength in paper silver futures. Clearly there are some contracts in backwardation, just as there have been on and off for the past year or more.

Doubled up on the 2xHL March18'22 6 strike calls. ...and will be looking to liquidate FSM March18'22 4 strike calls at double price paid if strength there continues. Also I've a couple HL March25'22 6 strike calls that I should be able to flip for 100-150% profit, so I'll look to set that up.

Edit: Sold off 2xHL March25'22 6 strike calls for .57 a pop after picking them up for .21 each a week ago...so not a bad deal.

Only the FSM March18'22 4 strike calls remain of the short term flips that expire in March...the thing just won't stay ITM, but keeps teasing. Everything else short term(AUY, EXK, SAND) is April or May(NGD, TGB).

With the extra leverage available, I'm considering selling a put on RSX...which is obviously not without its risk.

 

[Jodster]

Excellent analysis above Solarion. Thx.
Let's ponder what happens when the NATO countries block Russia out of their financial markets...

There are some markets that rely on Russian energy, such as Germany. There are untapped markets such as China that could gobble up all resources Russia wants to sell. Goodbye Germany, we don't need European business anymore.

And most importantly, the existing NATO countries haven't considered the ramifications of cutting THEMSELVES off from Russia's allies.
What would the USA do if China decided to stop exporting to America. You gonna start making iPhones with a bunch of illegal wetbacks in Commiefornia? They would be $5000 a pop.

China accepted US debt and provided cheap goods. What if that ended?
The Chin's aren't stupid. They are getting ready to leave the USD game and work with their neighbors.

Russia said it's pushing ahead with building a massive natural-gas pipeline to China as Western sanctions rock its economy

The Soyuz Vostok pipeline would deliver up to 1.8 trillion cubic feet of natural gas each year to China via Mongolia, Gazprom said.

www.businessinsider.com

 

[Voodoo]

I found this article on Polymetal, the large Russian gold miner. This stock is getting really interesting to me. I just can't resist a disaster of a stock.. :) as long as the company sticks around.

Subscribe to read | Financial Times

News, analysis and comment from the Financial Times, the worldʼs leading global business publication

www.ft.com

These two statements in particular...

Norway’s sovereign wealth fund, one of Polymetal’s top 10 shareholders, has said it will dump all of its Russian investments as part of a wider package of support for Ukraine.

Analysts expect Polymetal, whose £1.6bn value is down from £7bn a year ago, to declare a final dividend of 75 cents a share when it reports results on Wednesday.


So I could potentially receive a 75 cents dividend (in pounds?) which would be about One Fifth of my investment handed back to me soon... But you also have a weird situation with a large owner forced selling... Hmm.. Normally I would worry about that debt repayment because it did get more expensive but then again this company literally mines money, so not that worried.

I went and looked and that wealth fund owned Zero at the end of 2020. They were not heavy in Russia. We will get the Dec 2021 holding number in two days.

Publications

www.nbim.no

 

[solarion]

You could also play POLY by stacking calls on SIL, while they're underperforming. Big WPM, PAAS, SSRM, and HL exposure to go with the 6% exposure to POLY, but I would see that as a positive.

 

[solarion]

Excellent analysis above Solarion. Thx.
Let's ponder what happens when the NATO countries block Russia out of their financial markets...

There are some markets that rely on Russian energy, such as Germany. There are untapped markets such as China that could gobble up all resources Russia wants to sell. Goodbye Germany, we don't need European business anymore.

And most importantly, the existing NATO countries haven't considered the ramifications of cutting THEMSELVES off from Russia's allies.
What would the USA do if China decided to stop exporting to America. You gonna start making iPhones with a bunch of illegal wetbacks in Commiefornia? They would be $5000 a pop.

China accepted US debt and provided cheap goods. What if that ended?
The Chin's aren't stupid. They are getting ready to leave the USD game and work with their neighbors.

Russia said it's pushing ahead with building a massive natural-gas pipeline to China as Western sanctions rock its economy

The Soyuz Vostok pipeline would deliver up to 1.8 trillion cubic feet of natural gas each year to China via Mongolia, Gazprom said.

www.businessinsider.com

China will publicly give lip service to the idea that Putin is naughty, while behind the scenes supporting him. That's what you get with Chinese bans on swift transactions with Russia. Wow, that's painful, now they can't transact in USDs and will be doing business in CNYs and/or RUBs. The sanctions put on by the West were a huge mistake to my mind, but then I believe Western gumbymints are trying to collapse their own economies.

Sold 1xAPR14'22 9 Put on the RSX for a 2.20 credit. So I'm officially in this thing now.

 

[Voodoo]

Trying another RCL complex option trade today. Just 1 leg and I got a whopping $20 credit or something. But it does take like $1,000 of margin. They announced an "announcement" on Friday for a corporate update. This can't be good news but we will see. The market makers own this stock. They ramp it in the morning and then it slowly fades. I am also short like 20 shares.

About $81 bucks a share today
Sold a March Call Spread $80 and bought the $85. Used that to buy a $70 Put. We'll see if i can make it work any better this time.

This is finally making some money today. RCL breaking down badly and the chart shows it now. I did put in an order to close the sold call for $1.25 (~80% of original premium). Not sure if I want to hold the puts or roll. Might keep the call just in case of a bounce near term.

Looks like a Head and Shoulders. And now down below all the MA's

 

[solarion]

Nice. I thought about more shorts, when I got back into this thing, but elected instead to focus on long commodity positions and selling contracts around them. Glad it's working for you. Good choice going after the cruise lines...their biz model is obviously damaged in this environment. First kung-flu and mandates, and now warmongering and rising inflation. Not a good business to be in just now.

I've rolled 4 of 16 SILJ Jan19'24 8 strike leaps down to Jan19'24 11 strikes while receiving a credit of 1.75 apiece for a roughly .08 reduction in delta. More freed up liquidity to gamble.

Edit: Rolled the remaining 12 SILJ Jan19'24 8 strike leaps out to 11 strikes and then popped the freed up capital into LAC(Lithium Americas Corp) 2xJan20'23 22.5 strike calls. LAC has seen a healthy pullback from the run up last year and it looked like a good time to wade back in there.

One of my budget uranium explorers(ENCUF) was halted pending news. Presumably a buyout, but we shall see.

 

[Voodoo]

I found this article on Polymetal, the large Russian gold miner. This stock is getting really interesting to me. I just can't resist a disaster of a stock.. :) as long as the company sticks around.

View attachment 247225

Subscribe to read | Financial Times

News, analysis and comment from the Financial Times, the worldʼs leading global business publication

www.ft.com

These two statements in particular...

Norway’s sovereign wealth fund, one of Polymetal’s top 10 shareholders, has said it will dump all of its Russian investments as part of a wider package of support for Ukraine.

Analysts expect Polymetal, whose £1.6bn value is down from £7bn a year ago, to declare a final dividend of 75 cents a share when it reports results on Wednesday.


So I could potentially receive a 75 cents dividend (in pounds?) which would be about One Fifth of my investment handed back to me soon... But you also have a weird situation with a large owner forced selling... Hmm.. Normally I would worry about that debt repayment because it did get more expensive but then again this company literally mines money, so not that worried.

I went and looked and that wealth fund owned Zero at the end of 2020. They were not heavy in Russia. We will get the Dec 2021 holding number in two days.

Publications

www.nbim.no

I got hit today on my stink bid for 200 more of this stock. Already at $5 so really surprised this order hit. This is such a low volume stock. Still happy. Will see how it goes.

 

[Voodoo]

This is finally making some money today. RCL breaking down badly and the chart shows it now. I did put in an order to close the sold call for $1.25 (~80% of original premium). Not sure if I want to hold the puts or roll. Might keep the call just in case of a bounce near term.

Looks like a Head and Shoulders. And now down below all the MA's

View attachment 247251

So I've now closed out 2/3 of this trade. Not bad but I was too early as it had that second attempt at a bull trap. Luckily I had enough time. Made $222 so far on 1 spread with $172 worst case (holding the 85 calls for a possible bounce).

 

[solarion]

Might want to check into the old dave and busters short. It's been on a huge bull run for awhile, no idea why as I haven't been shorting things of late.

Q4 2021 Unit labor costs were just quietly revised to three times higher by the bureau of propaganda labor and statistics.

Can anyone say....cost push inflation? How about stagflation?

Fourth-quarter labor costs revised higher

The increase in labor costs in the fourth-quarter was raised to 0.9% from the initial estimate of 0.3%, the Labor Department said Thursday.

www.marketwatch.com

High PE service industry business are going to see huge profit margin contraction...followed by significant earnings call misses imo.

 

[Voodoo]

Might want to check into the old dave and busters short. It's been on a huge bull run for awhile, no idea why as I haven't been shorting things of late.

Q4 2021 Unit labor costs were just quietly revised to three times higher by the bureau of propaganda labor and statistics.

Can anyone say....cost push inflation? How about stagflation?

Fourth-quarter labor costs revised higher

The increase in labor costs in the fourth-quarter was raised to 0.9% from the initial estimate of 0.3%, the Labor Department said Thursday.

www.marketwatch.com

High PE service industry business are going to see huge profit margin contraction...followed by significant earnings call misses imo.

Yeah I closed that out at $32, might get back into it.

 

[solarion]

I've stacked a bit of LODE(Comstock) while they're cheap. 4xJuly15'22 strike 2 calls. The company, which has been buying up controlling interest in LiNiCo for some while, doubled their stake in Jan...bringing it to 90%. I'm a sucker for lithium producers in this environment, so I pulled a trigger.

I've also taken some profit off the table in SAND, cutting calls in half and covering a short put.

Added more GORO and URA calls on weakness.

 

[solarion]

A chart I generated by accident today as I was looking into an explanation of SBSW's unusual price action Friday. I'd been looking for a pullback to get back in, but the thing was just soaring day in and day out. Anyway, on Wednesday last I got my opportunity snapping up 2xOTM July15'22 20 strike calls with SBSW down roughly 5%. Since then it has done nothing but rocket higher. At this point it appears to be on the cusp of breaking out to a fresh all time high and enter into full on bull run mode.

The gravy is that even with the huge run up from the December lows, the PE right now sits at only 6.3 in a commodity bull run that's just getting started imo...and particularly so in platinum.

 

[solarion]

Buy 4xSBSW April14'22 20 strike calls for 1.33 each to flip.

Thank you criminal bankster scumbags for the 7% swing providing the buying opportunity.

Taking a small OTM position in BLOK in anticipation of a relief rally in tech. 1xMay20'22 32 strike call.

Stacked SVM(Silvercorp Metals) 4xOct21'22 5 calls for .5 each. The thing is simply too cheap. I have it at roughly 84% below fair value. Ridiculous.

 

[solarion]

SBSW golden cross chart pattern...as it nears a new all time high. I took advantage of an opportunity to roll my 4 freshly stacked April calls out to July15'22 while leaving the strike @ 20. This was for a debit of .75 each, so now I've 6 July calls on what I suspect will turn into a monster, particularly if supply from Russia/Ukraine continues to be threatened.

Also rolled a couple Sandstorm 2023 calls out to 2024 and moved the strike from 4 to 5 while collecting .90 in credit. My only streamer, but I'm considering adding some others. Been thinking about taking a position in SIL, which has lagged the other van eck mining funds due to the polymetal exposure in the hope that it plays catchup and to get a bunch of WPM exposure.

 

[solarion]

Stacked some GDXU pre-market, some SILX contracts 4xJun17'22 7 strike calls and am slowly adding to my SBSW July15'22 strike 20 position on weakness. Please let the miner strike be resolved...

Oh yes, and I am crazy AF stacking calls on a leveraged silver ETF. Maybe I will get crushed...we shall see. :)

Oh stacked some CCJ calls 2xJUN17'22 25 strike calls.

 

[Voodoo]

Russia might be opening back up at least the Forex markets. Good sign and I think they should slowly opening back all their markets.

 

[solarion]

...meanwhile the potato head resident is banning Russian oil imports because virtue signaling. New inflation numbers are out on Thursday, they're not going to be pretty, and this dumbass is cutting off 8% of US supply because politics.

Anyone that thinks he wasn't installed to drive the US economy straight into a brick wall isn't paying attention.

 

[the_shootist]

...meanwhile the potato head resident is banning Russian oil imports because virtue signaling. New inflation numbers are out on Thursday, they're not going to be pretty, and this dumbass is cutting off 8% of US supply because politics.

Anyone that thinks he wasn't installed to drive the US economy straight into a brick wall isn't paying attention.

The Congress critters must be scurrying like rats.

 

[solarion]

To rig moar elections perhaps. Piglosi loves the oil ban. "Public service" has made her fabulously rich and she doesn't give a shit if gasoline is $7 a gallon. It's a problem for the peasants to deal with while she eats her $18 $27 a pint gourmet ice cream.

These creatures are too garbage...even for hell.

 

[the_shootist]

To rig moar elections perhaps. Piglosi loves the oil ban. "Public service" has made her fabulously rich and she doesn't give a shit if gasoline is $7 a gallon. It's a problem for the peasants to deal with while she eats her $18 $27 a pint gourmet ice cream.

These creatures are too garbage...even for hell.

I hope I live long enough to see these evil scum swinging from lightposts

 

[solarion]

Stacked some IAG(IAMGOLD...and yes the name sucks) on weakness. 8xJun17'22 strike 4 calls. I've the thing at roughly 93% below fair value. Insanity.

 

[solarion]

SBSW down another 4.5% or so at open, so I added again. Now at 10xJuly15'22 20 strike calls...with a cost basis down to 2.15 each. Given the price rise of PGM metals and the fact that Putin has now said he'd block Russian imports/exports to the end of 2022, I would expect SBSW to have a fantastic year.

AXU(Alexco Resource) 4xOctober'22 2.5 strike calls.

GATOs silver soaring after reporting record production, so I'll be looking to take some profits there up 70% or so. Likely I'll cut my position by 50% rather than closing it out, as Gatos remains cheap on a relative basis.

Hoovered up some CDE calls on weakness. 4xJun17'22 strike 5 for .60 each.

Stopped out of BLOK with a 21% gain. meh.

Stacked MUX(McEwan Mining) 8xAUG19'22 strike 1 calls for .18 each.

Stacked PLG 4xJUL15'22 strike 2.5 calls for .70 each.

 

[Voodoo]

Tried getting a cheap BBBY Call spread last couple days but never hit. Went with the Jan'23 $55-80 spread for under a $1 but no takers. Want in on BBBY but with that surge the options got pricey.

I have gotten myself some Exe Jan'23 $5 calls for a bit over a dollar each.
Got myself first SILJ calls today 2 Aug'22 $12 calls for $3.30. Forget the delta but only about a $1 premium. Not too bad.

 

[solarion]

Risk tolerant fella like you, I'd figure you going for something already levered up to the gills to lever up further with options. ;p

I've been stacking SILX calls, but the OI is low, so the executions are not always pretty. Anyway, I've slowly built myself a decent position. Contracts on the damn thing move around like a cheap crypto currency.

Stacked some WTI. Great earnings report and the black gold pullback and all. 2xJuly15'22 strike 6 calls.

PLUG on weakness 2xJune17'22 strike 25 calls. Surely rising energy costs will help these guys.

LAC 2xMay20'22 strike 27.5 calls. Was pleasantly surprised when this lowball bid executed. LAC shares have been soaring of late, so I tried to grab some cheapies to flip. For. The. Win.

GATOs 2xAUG'22 strike 5 calls. Reloaded on weakness and ready to flip again.

 

[Voodoo]

Backed into my BBBY position in my margin account today. Ended up selling a $20-$15 put spread for ~$2 or 40% of spread. Used some of that money and bought a deep ITM Jan'23 $12 call for $11 bucks.

 

[solarion]

Considering adding EMX royalty(streamer) and Generation mining(PGMs) to my list of buys in the near term.

EMX is something of a contrarian thing as sentiment around the company is awful. Meanwhile insiders are grabbing up shares at low prices hand over fist.

Cole is the president, Winn is the executive chariman, Reed is the CFO, Cepeliauskas is the CAO, and all of them have buys over the past few months. It seems pretty definitive to my mind...and the thing is silly cheap at 2.28 down 30% YoY.

Generation mining is also seeing heavy insider buying and as their marathon PGM project progresses, it seems likely that they'll be increasingly a takeover target by one of the PGM heavies...like SBSW, which already has an 18% ownership share and options on a controlling interest.

 

[Au-myn]

I bought June 2.50 Calls a while back near bottom. Just sitting and waiting for the buy signal...

 

[solarion]

I don't recall ever snapping up any EMX, though I've kept an eye on it. I like streamers very much...particularly the cheap ones. Currently I've only SAND and WPM leaps, though I'm always looking for more good opportunities and EMX looks primed to run.

Also adding EQX(Equinox gold) and a penny stock Santacruz silver mining(SZSMF) to the list.

 

[Au-myn]

Currently holding EQX JAN 20 2023 7.50 Calls I swiped at 1.15.

 

[solarion]

Was stopped out of a few positions during the recent slam down(like CCJ). So I'll be re-deploying into some things I think are way too cheap. Though I wasn't stopped out of Sibanye-Stillwater, I took the opportunity to add more with it smashed down to 16 bucks and change...which is ridiculously cheap. It's now my largest single company position and I'll continue to add on further weakness.

 

[Voodoo]

I find it very telling that Gold was Slammed today and the miners are Up. Says a lot.

 

[solarion]

Yeah, the miners are telling a story. Platinum is down 15.2% in the past 5 days including another 7% today...yet platinum producers are rallying. It's almost like paper metal prices are fake AF.

 

[Voodoo]

Alright, made a bunch of trades again today. Help me Rhonda. Actually played some bearish protection on GME. Don't like it breaking what was good support at $87 with next support a giant air gap to the $40's. Perhaps some help in $66 range. Bought a Put spread for April and just some short term $55 puts in my IRA to help protect those shares after selling 1 $95 call for some cash to do that.

Stacked 350 more POYYF cause its under $1.75. Call me crazy
Picked up a little HYMC (are you crazy the miners and meme stocks are merging !!!)
And i just added 2 AG Oct $11 calls (look at that sweet, sweet bullish engulfing candle).

 

[Jodster]

Alright, made a bunch of trades again today. Help me Rhonda. Actually played some bearish protection on GME. Don't like it breaking what was good support at $87 with next support a giant air gap to the $40's. Perhaps some help in $66 range. Bought a Put spread for April and just some short term $55 puts in my IRA to help protect those shares after selling 1 $95 call for some cash to do that.

Stacked 350 more POYYF cause its under $1.75. Call me crazy
Picked up a little HYMC (are you crazy the miners and meme stocks are merging !!!)
And i just added 2 AG Oct $11 calls (look at that sweet, sweet bullish engulfing candle).

Kinda disappointed you didn't get some HYMCZ

 

[Voodoo]

Kinda disappointed you didn't get some HYMCZ

I don't mind gambling now and then but court cases and judges just piss me off. Give me some of those real (clearly faked) shares. The damn thing has traded like 5x the entire float today. Yeah right.

 

[Jodster]

I don't mind gambling now and then but court cases and judges just piss me off. Give me some of those real (clearly faked) shares. The damn thing has traded like 5x the entire float today. Yeah right.

HAH! The hangover will be epic . .

 

[solarion]

Back into EXK on weakness(share dilution) 4xMay20'22 strike 5 calls for 0.60 each. Seems a bit much on the downside, so hope to flip them if/when endeavor climbs back above 5 bucks a share.

Edit: Added 4 more EXK calls near the lows of the day for a cost basis there of .57.

Likewise Hecla is looking kinda cheap at 6.52 currently so I grabbed a couple June17'22 strike 7 calls there for .72 each.

Edit: Added 2 more HL calls for a cost basis of .68.

EMX 10xJune17'22 strike 2.5 for .15 each...ridiculously cheap.

Edit: Added 2 more EMX calls. @ 0.15 each.

Added 4 more HYMC @ .45 Total position is 14xAUG19'22 strike 2.5 for a cost basis of .53 each.

EQX 4xJuly15'22 @ .96 each.

GENM 200 shares @ .94.

SBSW 2xJuly15'22 strike 20 calls @ 1.20.

NEXA(resources). This is a SA zinc miner with lots of PM production. I have it at roughly 85% below fair value. 2xJune17'22 strike 10 calls.

Edit: Added two more June17'22 strike 10 NEXA calls.