Silver / Gold Leaps

gdtrader · Feb 21, 2009

Hello,

I wanted to buy physical metals and buy put leaps on them 2-3 years out of the money but I can't find a way to do this, most of the stuff like slv and gold etf's only go out about a year at most. Any adivce??

Thanks,

nazzdack · Feb 21, 2009

Quote from gdtrader:
Any advice?

1) ?....long underlying and long puts?.......You could consider merely buying long-dated call options on gold futures at the COMEX/CME.
2) If you're spooked by the outright premiums, you could do some type of spread-combo to reduce your cash outlay.

dagnyt · Feb 21, 2009

Quote from nazzdack:

1) ?....long underlying and long puts?.......You could consider merely buying long-dated call options on gold futures at the COMEX/CME.
2) If you're spooked by the outright premiums, you could do some type of spread-combo to reduce your cash outlay.

I know you know, but

Long calls = long underlying + long puts
Premium is the same (when interest is counted)

Mark

JJacksET4 · Feb 21, 2009

Quote from gdtrader:

Hello,

I wanted to buy physical metals and buy put leaps on them 2-3 years out of the money but I can't find a way to do this, most of the stuff like slv and gold etf's only go out about a year at most. Any adivce??

Thanks,

I'm not an expert on this ETF, but what about GLD? It appears to have leaps to Jan 11.

JJacksET4

gdtrader · Feb 21, 2009

GLD does not look bad, I would like something that trades at a little cheaper price to pay lower cost of insurance but not bad idea.. Bottom line I want to buy the physical asset and buy the cheapest available insurance policy in the event I am wrong. If today the trade cost me 5% premium and silver and gold goes up 30-40% I still win and if it goes down far enough I could still make somthing on the puts if price is right... just need to figure oz per price v.s. insurance costs

tickmagnet · Feb 21, 2009

ABX options for july 40 , you can't go wrong.

scriabinop23 · Feb 21, 2009

Quote from gdtrader:

GLD does not look bad, I would like something that trades at a little cheaper price to pay lower cost of insurance but not bad idea.. Bottom line I want to buy the physical asset and buy the cheapest available insurance policy in the event I am wrong. If today the trade cost me 5% premium and silver and gold goes up 30-40% I still win and if it goes down far enough I could still make somthing on the puts if price is right... just need to figure oz per price v.s. insurance costs

I'll sell you some OTC puts a few yrs out. How many oz do you want me to buy from you for $800?

gdtrader · Feb 21, 2009

lol, actually looking for 100oz bar of gold and 1000oz bar of silver. If you hedge it right you should be fine.. Imagine even you had bought oil at 140 physical and loaded up on puts you would still of made money and have the physical asset to work with afterwards. All I am saying if you can hedge yourself and protect your net worth from inflation then why not?? as long as the premium is not that bad.. Just have to it before anyone else does otherwise its not worth it just like anything else in life.

gdtrader · Feb 21, 2009

ABX was good looks like has puts go far out enough, move just like gold.. You have anything good for silver to work with besides SLV??

scriabinop23 · Feb 21, 2009

Quote from gdtrader:

ABX was good looks like has puts go far out enough, move just like gold.. You have anything good for silver to work with besides SLV??

I recommend you sell near term puts every quarter versus selling leaps. You'll profit a lot more on theta to make it worth your capital.

And stick to GLD and SLV if you want to stick to the price of the commodity.