Stock / Symbol: Eldorado Gold Corp / EGO
Price at trade post: $13.45
Option Strategy: [private_monthly]diagonal call spread[/private_monthly]
Reasoning: With most gold miners, like EGO, not participating in gold's rise from it's low on Dec 29, we think [private_monthly]it's the miners time to shine. EGO is a best of breed miner and boasts solid fundamentals. Technically, EGO has a good level of support at $13.10. The trade we're initiating allows for a breakeven with EGO trading as low as $12.55 on Mar 16. It should also be noted that EGO does report earnings the morning of Feb 24, but we think that this trade can weather some negative news.[/private_monthly]
Trade Details : [private_monthly]
BTO 3 EGO Jan13 7.5 Calls
STO -3 EGO Mar12 13 Calls
for a net debit of $5.35 per contract (day order, limit order)
[/private_monthly]
Requirements
Cost/Proceeds: $1620
Option Requirement: $0
Total Requirements: $1620
Estimated Commission: $12.95
Max Risk: $1,620
Profit Range: $12.55 + (Mar 16)
Max Profit: $115 or 7.1% @ $13 by Mar 16
Suggested Stop: @ $11.64
Speak Your Mind