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« Silver-Prices.net: Portfolio Update 25 January 09 | Main | Hecla Mining Company: Bought March $5.00 Call Options »
Saturday
Jan172009

Hecla Mining Company: Starting to move?

HL Chart 17 Jan 09




Chart courtesy of StockCharts.com

Yesterday Silver bounced back with a gain of $0.78 or 7.42% to trade at $11.22, as we write, after a lacklustre start to the year. Once again we expect silver to come out of the morass and be one of the better performing asset classes.


We can see from the chart above that Hecla Mining rose by about 10% on Friday to gave us some comfort, however we still expect to see HL get up off the floor and put in a few more days like this one. No doubt it will take off when our concentration is focused elsewhere! As regular readers will know we recently purchased a number of Call Options on Hecla Mining, which we will need to keep an eye on as getting this trade wrong, can wipe out the total amount of cash put at risk. Options are leveraged and can oscillate violently on a daily basis, so if you would rather sleep on a night they are probably not for you.

On January 9th, 2009 we purchased a small number of the March 2009 Call Options (HLCA) for $0.10 per contract at a strike price of $5.00. These contracts closed on Friday at $0.10, so no change there.

On January 6th, 2009 we purchased a small number of the March 2009 Call Options (HLCZ) for $0.75 per contract at a strike price of $2.50. These contracts closed on Friday at $0.40, so we need to see some improvement to get this one out of the red.

Have a sparkling week.


Stay tuned for updates in this fast moving market…
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Reader Comments (3)

It looks like silver should continue higher over the next few weeks...until the first or second week of February...then I would head for the exit (let the charts be a helpful guide - also historic time for silver peaking).
Being new to option trading the Hecla Call Option - $0.10 March $5.00 - looks very interesting for just such a trade -minimal upfront cost with the low option price.
I am being very careful, prior to risking anything.
Thanks for letting us newbies watch this option trade (and hopefully participate in). I find the best way to learn to do something new is by watching - most of these on-line videos/newsletters or books for learning options contain too much verbage and technical speak...Cut to the chase and walk us thru a trade!
regards,
Mark

January 18, 2009 | Unregistered CommenterMark

Mark, Please do not make a move until you are very comfortable with your own decisions. Also, only risk very small amounts of your cash, with options your cash can dissipate quickly and it hurts. We tend to avoid the more complex trades and try to keep the trade simple. However we do have options traders within our readership who chip in from time to time with really good advice so you might want to keep an eye on those strategies when they pop up. Go gently and good luck with your trades and if you have the time please let us how you get on.

January 18, 2009 | Unregistered CommenterSilver Prices

Thanks for the advice, Silver Prices. Maybe you could give the readership a "heads up" when you mention any potential trades from options traders. Don't worry...risk mitigation is my number one concern, even when trading equities...As long as I am putting cash to work that I can afford to lose (very small amount), use a stop loss and limit the number of contracts (again very small) that should be sufficient for this trade.
Thanks,
Mark

January 18, 2009 | Unregistered CommenterMark

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