One thing I have always found interesting about gold bugs is the constant infighting!!
Jim Sinclair shares the sound fiscal views and fundamentals that all of us share and yet we tear each other down because of pereceived hypocrisy in margin trading.
Jim doesnt sell anything on his site. He does have ties to various companies.
Bottom lin is that he is a gold guy with a proven record. I dont agree with everything he says, but who cares? Fundamentally, we are the same.
Regarding the margin issue, he does not recommend trading on margin given the extreme swings that are sure to happen in this upcoming market. The average person that gets a margin call ends up getting squeezed because of capitalization issues.
I dont read Jim Sinclair for TA, I read for fundamentals. I trade on my own TA and (small) experience.
I am certainly not a sheep...I trade.
The infighting and judgemental attitudes is not helping the cause for sure.
Getting back to gold, I think that we are stuck in a range because gold is still being thought of as a commodity...and until it is thought of as a currency to replace fiat, we are not going to go higher with any conviction. We need a currency crisis. That is what will take us on the Wave 3 of 3 EW theory run.
If we dont get the currency switch over, gold is going to suffer horribly unless big money comes to the table in its support.
Here is a good explanation of what we were saying earlier...
John
A covered call is a call you write on stock you own. If you think a stock you own will decline modestly in price in a bear market, but think it will rebound over the long term, you might write a covered call as an alternative to purchasing a protective put. The premium you receive offers some limited downside protection.
If the price moves down as you anticipate, and the call expires with no value, you'll keep any premium you received. That premium can at least partially offset any paper loss on the stock.
If the stock price increases, your call might become in-the-money. If you think you might face assignment, you can always close out your option position by buying back the call you wrote, possibly at a net loss. However, you'll hold onto your stock and have an unrealized profit.
If the option is exercised and you're assigned, you'll have to sell your shares at the strike price. That means you'll miss out on any future gains the stock may have. In addition, you may owe capital gains tax on the transaction.
4 comments:
One thing I have always found interesting about gold bugs is the constant infighting!!
Jim Sinclair shares the sound fiscal views and fundamentals that all of us share and yet we tear each other down because of pereceived hypocrisy in margin trading.
Jim doesnt sell anything on his site. He does have ties to various companies.
Bottom lin is that he is a gold guy with a proven record. I dont agree with everything he says, but who cares? Fundamentally, we are the same.
Regarding the margin issue, he does not recommend trading on margin given the extreme swings that are sure to happen in this upcoming market. The average person that gets a margin call ends up getting squeezed because of capitalization issues.
I dont read Jim Sinclair for TA, I read for fundamentals. I trade on my own TA and (small) experience.
I am certainly not a sheep...I trade.
The infighting and judgemental attitudes is not helping the cause for sure.
Getting back to gold, I think that we are stuck in a range because gold is still being thought of as a commodity...and until it is thought of as a currency to replace fiat, we are not going to go higher with any conviction. We need a currency crisis. That is what will take us on the Wave 3 of 3 EW theory run.
If we dont get the currency switch over, gold is going to suffer horribly unless big money comes to the table in its support.
Just my two cents.
No response? I am not trying to stir the chit here either. Hopefully we can all have good debate/conversation here. :)
I am sitting here watching a good Sharks game btw...
Yeah, no infighting really meant on my part. For me it's how I got into this.
Cube, I forgot you were in the biz. Of course you would have an advance knowledge in that case.
Where were you when I needed you! ;-) lol
Cubed,
Here is a good explanation of what we were saying earlier...
John
A covered call is a call you write on stock you own. If you think a stock you own will decline modestly in price in a bear market, but think it will rebound over the long term, you might write a covered call as an alternative to purchasing a protective put. The premium you receive offers some limited downside protection.
If the price moves down as you anticipate, and the call expires with no value, you'll keep any premium you received. That premium can at least partially offset any paper loss on the stock.
If the stock price increases, your call might become in-the-money. If you think you might face assignment, you can always close out your option position by buying back the call you wrote, possibly at a net loss. However, you'll hold onto your stock and have an unrealized profit.
If the option is exercised and you're assigned, you'll have to sell your shares at the strike price. That means you'll miss out on any future gains the stock may have. In addition, you may owe capital gains tax on the transaction.
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