Silver went on a tear today putting on $0.55 to close at $18.84 and Hecla Mining joined in the fun with a gain of almost 7%.

To recap on the 17th June 2008 we purchased the JAN09 Call options at a strike price of $10.00 for $1.00 per contract for the Hecla Mining Company. Back then we were of the opinion that this stock was oversold having been sold down from the $13.00 level to close at $8.28 when we made our purchase.

Today Hecla Mining closed at $9.45, up $0.59 or 6.66% on the day. The Call Options responded accordingly and put in a good day by finishing the session at $1.60 for an overall gain of 60% less costs since we purchased them.

Also note that silver has broken out of its trading range where it has been consolidating over recent months between $16.60 and $18.50. If this holds next week we could see silver continuing this explosion to the upside.

As an exit strategy, if this option doubles next week we may consider selling 50% of our position in order to protect what we have and let the other 50% run higher.

We entered this trade in the belief that we could double our stake and that is what we still hope to achieve, however the environment can change ever so quickly these days so stay on your toes and be prepared to move fast.

Hecla Mining Limited trades under the symbol of HL on the New York Stock Exchange.

Have a good one.

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