I have another question about leaps that the article didnt cover, maybe someone will know. I got last week i bought 8 contracts calls strike 21 premium was 1.02 each on GOLD ( Barricks Gold) They had earnings the other day that were pretty good. My contracts were good until March 11th. Today the vale of the stock got up to 23.40 and I sold them all for a decent profit.
I was reading about Barrick Gold and it appears they will be buying back shares.
https://www.barrick.com/English/new...-announces-share-buyback-program/default.aspx
" Barrick believes that, from time to time, the market price of its common shares trade at prices that may not adequately reflect their underlying value."
My question is, if you buy long calls leap say to January 2024 , and during this time the company buys back all of these shares.. how does that affect the strike price of your contract over time? IF they buy back shares, to resale them at a higher price im guessing? I dont know how it works.. but my main question is, will this affect the contract in a good or bad way?
Other question would be, would a person even want a contract out that far? How would a person benefit from this. I would guess if a person feels that the price of the stock os going to be going up considerably over the next 2 years?
Current value of GOLD is 23.30
I think an option for this stock was like 5.05 premium barley ITM strike 22 right now this is for jan 2024 expiry.
There is a jan2023 expiry thats 1 year shorter, but strike at 23 dollars and the premium is 3.25
If you felt bullish about this for the next 2 years.. would you just buy a 2 year leap? Would you sell it if got way up into the money and just roll into a new one?
Instead of erasing my question, I am leaving it up, I found answer to some of this. INTHEMONEY on your tube talks about this