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2006 Nov 29

Sinclair on options

The Solution

The solution for you is to trade gold and gold share options (limited loss and no margin calls) but not to write them. The solution is not to trade option spreads because nobody gets rich in spreads; they generally only launder money of scam commissions.

They demonstrate you are mathematicians and so what? Pros don't scream at that statement. What I consider a fortune and what you consider a fortune might be two different things. Options are only for the start and finish of a move and have little application in the middle.

For you and others like you, I will prepare a "how to" article on options this weekend. They are not investments and apply to only a few out there. But like all members of the Community you have a piece of whatever I am able to offer. I will therefore deliver.

For the conservative majority, it can be a learning experience for the time you wish to sell covered options on your positions. As an example, a covered option would be to sell a call on 100 NEM because you own it and want income. The risk there is only lost opportunity.

The day will come when such a transaction is wise but that is down the road. Right now we trade and invest for opportunity.