Gold/Silver Raito

Discussion in 'Options' started by cactiman, Aug 27, 2012.

  1. "The bottom line is silver is now quite undervalued relative to gold. It has been losing ground compared to its primary driver for over a year now following a massive mini-mania spike. But the selling in recent months has been excessive, driving silver too low relative to prevailing gold prices. So silver is likely to outperform gold in this year’s upcoming strong season for the precious metals, which is due to start soon...Seize the day and load up before the autumn rally."
    Adam Hamilton, CPA (July 20, 2012)

    The attached chart shows the Gold/Silver Ratio since this prediction was made.
    Another good call by A.H. at ZEAL:
  2. Added to my SLV position today.
    Currently holding November 30.5, December 28, December 30, and March 30 Calls.
    Now it's time to sit back and see if the Breakout/Rally has some legs...
  3. Cereal


    Those calls must be quite expensive.

  4. I feel more comfortable with Single Options if I pay a bit more to get as high as Delta as I can, with at least 3 months of time for the Underlying to work things out.
    The price limit is 2% of Equity per Option, as a loss control measure.

    My reading of the chart/price action, along with the macro world/economic news, etc. tells me SLV has a good chance to extend this move at least up into the 30's.
    We'll see soon enough...
  5. Looks like Bernanke came through for SLV this morning.
    Closing above 30 would be significant. We'll see.

  6. Nice Breakout SLV!
    +4.59% in one day?
    Bloody lovely.
  7. "options are meant to be sold" = from one of the most profitable options traders ever. Don't get caught buying stuff.



  8. My account is 80% Credit Spreads (sold) and 20% Singles (bought).
    So I guess I tend to agree, most of the time.

    But IMO, there are 2 big advantages to occasionally buying singles over selling spreads:
    1. You can make a lot more than you can lose, versus losing more than you can make.
    2. You can sell-to-close and take those "infinite" profits whenever you want, versus having to wait for Time Decay to finish the slow steady tick-tock credit-acquiring process.

    Who is that trader BTW?
  9. Yeah, that's the sales pitch...the "unlimited upside vs. the known and limited downside" - which simply means, all you can lose is everything you bet, LOL.

    Well, my brother is one, and Blair Hull is the other one. You can check "New Market Wizards" for Blair....and he sold "Hull Trading" to Goldman for about $500 million, not bad for an old blackjack playing buddy of ours, LOL.

  10. Ken Trester sells 90% and buys 10% of his Options I think.
    But he buys cheaper, shorter term OTM, "lottery ticket" Options - all or nothing, which depend on a big move to score.

    I prefer buying ITM, longer term Options - when affordable, so there's more chance of having some premium to sell, if things don't go as well as planned.

    I have all the Market Wizards books (newest one about Hedge Fund Managers is on order!), so will check that out - thanks.
    #10     Aug 31, 2012