Call Options on ABX on 5/23/2013

Barrick Gold Corporation (Barrick) is engaged in the production and sale of gold, as well as related activities, such as exploration and mine development. Barrick also produces copper, principally from the Zaldivar and Lumwana mines and holds other interests, including a nickel development project located in Africa. Barrick's business is organized into seven primary operating segments: four regional gold businesses, a global copper business unit, an oil and gas business, and a capital projects group. Its producing gold mines are concentrated in three regional business units (RBU): North America, South America, and Australia Pacific. Its Copper business unit contains producing copper mines located in Chile and Zambia and a mine under construction located in Saudi Arabia. Barrick's North American RBU consists of its Cortez property (consisting of the Cortez mine and Cortez Hills mine, and also a material property, and 60% interest in the new Pueblo Viejo mine.


Stockwinners is bullish on this name for the following reasons:

  1. It seems that gold has found its support and is ready to move to the upside. With the shaky price action in the market today, gold seems like a good hedge as GLD price action is indicating money moving to gold. ABX is an indirect play in the gold bounce.

Trade

  • Buy 1 July $20.00 Call at $1.10
  • For a net debit of $1.10

Profit/Loss Analysis

  • Breakeven at $21.10
  • Maximum profit is unbounded
  • Maximum loss is ($110.00) at strike of $20.00

Closing Summary

  • Sold 1 July $20.00 Call at $0.00

Position closed on 7/22/2013 at price of $0.00 with a -100.00% loss in 59 days.

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