Gold and silver prices are down

Varmint said:
It was inevitable once brokers said you can only sell GME, not buy. If they big players start losing, they change the rules.
Click to expand...

Either way it was inevitable. Spikes and manias like this are not sustainable... period. They are built on hype and emotion. Everything ultimately returns to the mean.
 
Varmint said:
What’s the best result, it dips under $5 then goes back up?
Click to expand...
It depends. If it drops to $4.99 or less on expiration, I will be obligated to buy HL at $5 per share.
It is my desire to add to my HL position, but not at current prices,. My best case scenario would be for HL to drop to $4.99 at expiration, so I can have the shares put to me at $5. After this a move to $30 would be welcome.
If HL goes to $3 by expiration and I let assignment happen, I'll be carrying an unrealized loss of $1.75 a share.
If HL is above $5 at expiration, the option expires and I net my $25 per contract. $25/$500 = 5%
Needless to say, if HL goes to $100 by 19 Feb, I missed the boat. If I truly believed this will occur, I'd be buying calls!
 
richc said:
Either way it was inevitable. Spikes and manias like this are not sustainable... period. They are built on hype and emotion. Everything ultimately returns to the mean.
Click to expand...

It's ok, if the hedge funds had to cover their shorts at $300-400, then they lost billions and the mission was accomplished. Hopefully some WSBers got out with some nice returns as well.
 
NavelOfficer said:
It depends. If it drops to $4.99 or less on expiration, I will be obligated to buy HL at $5 per share.
It is my desire to add to my HL position, but not at current prices,. My best case scenario would be for HL to drop to $4.99 at expiration, so I can have the shares put to me at $5. After this a move to $30 would be welcome.
If HL goes to $3 by expiration and I let assignment happen, I'll be carrying an unrealized loss of $1.75 a share.
If HL is above $5 at expiration, the option expires and I net my $25 per contract. $25/$500 = 5%
Needless to say, if HL goes to $100 by 19 Feb, I missed the boat. If I truly believed this will occur, I'd be buying calls!
Click to expand...

Assignment means you can choose whether to buy at $5 when HL is $3?

My take is that HL and other silver miners will continue the trend they were on, which is to retest the Nov./Jan bottoms - that would put Hecla under $5 in February - but it might be before or after the 19th.

My method is similar, looking at the chart I'd put in a stink bid for Hecla at $4.6 and hope for the best.
 
Varmint said:
Assignment means you can choose whether to buy at $5 when HL is $3?

My take is that HL and other silver miners will continue the trend they were on, which is to retest the Nov./Jan bottoms - that would put Hecla under $5 in February - but it might be before or after the 19th.

My method is similar, looking at the chart I'd put in a stink bid for Hecla at $4.6 and hope for the best.
Click to expand...
Negative. Assignment means I have to buy at $5. Selling a put obligates the seller to buy at the strike price, if assigned.
Options can be traded just like shares, so I can always close my position to thwart the potential assignment, if necessary.
All that I can guarantee with this position (assuming I let it run to expiration) is that I will either net a 5% capital gain or I will acquire HL at an adjusted cost of $4.75 per share. These are the only two outcomes if I maintain this short position to expiration.
 
NavelOfficer said:
Negative. Assignment means I have to buy at $5. Selling a put obligates the seller to buy at the strike price, if assigned.
Options can be traded just like shares, so I can always close my position to thwart the potential assignment, if necessary.
All that I can guarantee with this position (assuming I let it run to expiration) is that I will either net a 5% capital gain or I will acquire HL at an adjusted cost of $4.75 per share. These are the only two outcomes if I maintain this short position to expiration.
Click to expand...

I see, assigned means it's that price or below at expiration.

So suppose a week before the 19th, HL reaches $4.8, what would the option be worth then? Could you sell the options and just buy HL at $4.8 with new money?
 
Varmint said:
It's ok, if the hedge funds had to cover their shorts at $300-400, then they lost billions and the mission was accomplished. Hopefully some WSBers got out with some nice returns as well.
Click to expand...

It's a zero sum game. What one person wins another loses. And, yes, I hope most of the losses are from hedge funds too!
 
Varmint said:
I see, assigned means it's that price or below at expiration.

So suppose a week before the 19th, HL reaches $4.8, what would the option be worth then? Could you sell the options and just buy HL at $4.8 with new money?
Click to expand...
At $4.80 the Feb 19 $5 put is in the money by 20 cents. There is minimal time value remaining, so I'd expect to see an ask of about 20 cents (the amount of intrinsic value).
If I wanted to prevent possible exercise (still a week to go til expiration), I could close my position by buying back the contract, that is, buy the Feb 19 $5 put or roll the position forward to a later date.
However, since my original aim was to acquire HL at an adjusted price of $4.75 a share, I'd likely just let the position ride for one more week and let the shares be "put" to me.

Options can be assigned before expiration, but this doesn't occur that frequently. All "in the money" options will be settled at expiration.
Reading the following will aid in your understanding of options...
www.theocc.com

Publications

www.theocc.com www.theocc.com

Another point to be clear, when you sell an option, the premium is credited to your account that day, not at expiration. If I sell an option today, I will see that amount credited to my account today.
 
Last edited:
Silver isn't dead yet. Wall St. took action against silver yesterday, including raising the cost of margin for silver futures, putting out tons of articles on how the silver squeeze had failed, and taking on new shorts on silver and silver stocks.

And yet SLV and silver stocks are hanging in there - we saw huge inflows into SLV, not to mention cleaning out all the retail silver vendors of stock over the weekend.

This is not a quick hit like GME, it's a longer game, but still doable.
 
Varmint said:
Silver isn't dead yet. Wall St. took action against silver yesterday, including raising the cost of margin for silver futures, putting out tons of articles on how the silver squeeze had failed, and taking on new shorts on silver and silver stocks.

And yet SLV and silver stocks are hanging in there - we saw huge inflows into SLV, not to mention cleaning out all the retail silver vendors of stock over the weekend.

This is not a quick hit like GME, it's a longer game, but still doable.
Click to expand...
You seem like the big player on SLV. Are you still buying physical or just mining stock?
 
In God We Trust said:
You seem like the big player on SLV. Are you still buying physical or just mining stock?
Click to expand...

just silver miners. I bought enough physical silver in the heyday of EBay Bucks deals lol.

I have buy orders about 20-30% lower for Aftermath Silver, Defiance Silver and Blackrock Gold.

Already have full positions in SILJ, AXU and a few others.
 
Varmint said:
just silver miners. I bought enough physical silver in the heyday of EBay Bucks deals lol.

I have buy orders about 20-30% lower for Aftermath Silver, Defiance Silver and Blackrock Gold.

Already have full positions in SILJ, AXU and a few others.
Click to expand...

Did ebay do away with eBay buck bonus awards? That was awesome!!!
 
It's under $1800 but the premiums seem high on Apmex. Maybe they've always been high and I just haven't noticed, but with spot @ $1797 AGEs are quoted at $2044. Even a PAMP bar is $1998. Almost $200 over spot for a bar in an assay card?
 
Last edited:

Similar threads

Calcium Hypocholite - local and cheap water sanitizer!
Replies
6
Views
133
240Geezer
2
Gold Question from Newbie
Replies
23
Views
887
Varmint
Varmint
FREE….seed starting and basic garden planning & questions seminar. 4/6/24 Hardwick MA
Replies
7
Views
109
mousegunguy
mousegunguy
Problem with my ExPed DownMat 7...
Replies
9
Views
271
Andy in NH
Andy in NH
US Senators Are Being Issued Satellite Phones in Preparation for a 'Disruptive Event'
Replies
11
Views
1K
GM-GUY
GM-GUY
Back
Top Bottom