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Options trades for the precious metals

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  • Fri, Jul 19, 2013 - 02:23pm

    #1

    HughK

    Status Gold Member (Offline)

    Joined: Mar 06 2012

    Posts: 571

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    Options trades for the precious metals

Hey All,

I have done a brief search of PeakProsperity and have not come up with much recent information on how to buy options contracts for gold and silver securities.

I realize that there is some major counterparty risk with options contracts, especially in the wake of a major financial meltdown, and I concur with most others here at PeakProsperity in that holding physical precious metals is the most conservative and resilient way to hold PMs.

However, I would like to allocate a modest amount of my savings capital to some call options on gold and silver securities, including a few ETFs and a few specific stocks.  

If anyone out there (JimH?) is willing to share any advice regarding options trading for PM securities, I'd be grateful.  Or, if there is already a detailed thread on this that I have missed, if you could include a link to it, it would be nice.

Specifically, here are a few questions I have:

1.  Is it better to buy in the money and pay more, or slightly out of the money and pay less for a 6-month to 2-year time horizon?

2.  Is it possible to buy options in the Sprott ETVs?  (PHYS, PSLV, SPPP)

3.  Is it possible to buy options for SILJ (a junior gold miner ETF)?

4.  Does anyone know how to buy options for smaller stocks, such as the many Canadian miners that are traded in Toronto or in the U.S. as either OTC or pink sheets?  (Example – Golden Queen – U.S. symbol GQMNF; Canadian symbol GQM.TO)

OK, if you are dead set against options, I'd be happy to hear that as well, but I'm really hoping to hear about strategies and how-to for trading options on precious metals, as most of my modest savings portfolio is invested very conservatively, according to PeakProsperity, and I'd like to put a bit of capital into a more risky but possibly more lucrative investment.

Thanks a lot!

Hugh

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