The LEAPS Option Trader
105 W. Monument Street
Baltimore, MD 21201
Friday, January 20, 2006
#299
** Cash In On Placer Dome For 110% Profits
Placer Dome (NSYE: PDG) is days away from becoming part of Barrick Gold (NYSE: ABX). This combination will make the largest gold producer in the world. We bought our LEAPS before the takeover was announced. Since then, our LEAPS have soared in value because of the takeover and because of the move up in the price of gold.
We have a choice: We can hold the spread and become shareholders of Barrick Gold, or we can take quick profits on our position. I prefer to sell and take the money off the table for our FIFTH win this month.
Sell the YDI AW and buy back the YDI AE. Our cost for this spread was $1.90. Based on current prices you should be able to get at least $4 for a gain of more than 100% on this trade. Make sure that you use limit orders and exercise patience on this trade – don’t do the market makers a favor by entering market orders.
Regards,
Karim Rahemtulla
Bio:
Karim Rahemtulla is the former Investment Director of The Oxford Club. The editor of The Smart Options E-Report, The Income Trader – A Covered Call Strategy and The LEAPS Option Trader, Karim is also a regular contributor to The Oxford Club Communiqué. His highly successful trading systems use covered calls and LEAPS to boost returns on blue chip stocks, and during the bear markets of 2000 and 2001, his picks outperformed the major market averages. Educated in England, Canada and the U.S. and fluent in several languages, Karim travels the world to find the best investment opportunities for our members.
Copyright – 2006 Mt Vernon Options Club. Mt Vernon Options Club does not act as an investment advisor or advocate the purchase or sale of any security or investment. Mt Vernon Options Club expressly forbids its writers from having a financial interest in any security recommended to its readers. All of our employees and agents must wait 24 hours after an Internet publication prior to following an initial recommendation. And for hard-copy-only publications, 72 hours after the publication is mailed. Investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Mt Vernon Options Club provides its members with unique opportunities to build and protect wealth, globally, under all market conditions. The executive staff, research department and editors who contribute to recommendations are proud of the reputation Mt Vernon Options Club has built since its inception in 1984. We believe the advice presented to its members in our published resources and at our meetings and seminars is the best and most useful available to global investors today. The recommendations and analysis presented to members is for the exclusive use of members. Copying or disseminating any information published by Mt Vernon Options Club, electronic or otherwise is strictly prohibited. Members should be aware that investment markets have inherent risks and there can be no guarantee of future profits. Likewise, past performance does not assure future results. Recommendations are subject to change at any time.
