16-08-07

Gold & FX

Goldstocks were amongst the biggest losers over the last sessions.  Yesterday, we already sold puts on Golden Star Resources (GSS – USD 3.16 – TTD: + 7 %)).  Another gold mine, CRYSTALLEX (KRY – USD 2.75 – YTD: - 24%) was beaten down.  Since April the stock has lost half of its value. In the beginning of the year we successfully sold puts on the stock.  They all matured worthless because the stock moved higher (chart :  http://stockcharts.com/charts/gallery.html?kry).  Around the current stock price we think there is again some value is selling USD 2.50 puts. We pass on the order to sell 20 puts December 2007 with strike USD 2.50 at a limit of  USD 0.25.   The actual option price can be retrieved here: http://finance.yahoo.com/q?s=KRYUZ.X.  When the order is executed, we receive USD 500.  Our margin (100%) is USD 5.000.  This implies 10% yield in 1 month.  We only lose in case KRY would trade below USD 2.25 by the 21st of September.  KKR is `allowed`to sink another 18% before position turns red.

 

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