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Tuesday
Dec142010
The Accumulator Trade 1 Open 15 Dec 2010
Tuesday, December 14, 2010 at 02:44PM
The first trade for this Accumulator is as follows:
Purchased 100 contracts of Silver Wheaton Corporation (SLW) March 2011, Call Options, strike price of $42.00 for $3.30 for a cost of $33,000.00.
We reserve the right to trade this position as we feel fit and have not limited ourselves by any rules other then our intention is to roll the proceeds into the next trade. We have set a target of making one million dollars at which point the accumulator will be closed. At any time throughout this little venture we may decide otherwise and close it down. These are real trades with real cash so the maximum we can lose is this stake.
Should it be a disaster then its back to the drawing board for us.
Our normal trading activity will carry on as per usual.
This exercise is not part of anything that the www.skoptionstrading.com chooses to do.
Please regard as a bit of fun where we get to sweat and you get to chuckle.
Your decisions and your operating criteria is exactly that, its yours, your responsibility, you are accountable for your own actions.
The use of both stocks and options trades will form the basis for this exercise.
At times it may be difficult to purchase the number of contracts that we need in order to deploy all of the cash so we may need to buy a tranche of options on any given trading day. Hopefully we can dispose of them in one trade but again we may need a little time to complete the move.
The idea is to have some fun with it as we are sure it will make us laugh and cry. And this is definitely not something that you should try at home, got that, good.
For instance, if we start with $15,625 and were to achieve a 100% profit in 7 straight trades then the Accumulator would generate $1000,000.
$15,625
$31,250
$62,500
$125,000
$250,000
$500.000
$1000,000
The probability of this being achieved is just about nil as any speculator will tell you.
We have thought about a few names, such as the $1000,000 Accumulator, or how I lost my shirt, etc, but will stick with The Accumulator.
We do not have a time frame for this exercise and we will not be rushed into making a trade just for the sake of doing so.
We may utilize all three sites, gold, silver and uranium but we will keep a summary of the trades at www.silver-prices.net which we will update as we trade.
We may also lose our nerve if and when the numbers get too high and the trade looks to be going against us, so we would have to settle for less or we could get stopped out etc. Having to place the total amount into the next trade will also test our emotions to the limit. However, if we start small then that is the maximum amount of money that we can lose.
Over in the options trading pit, we had a number of stops triggered , but we walked away with an average gain of 32.7% so we now have 59 winners out of 61 trades, or a 96.72% success rate.
The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.
So, the question is: Are you going to make the decision to join us today, before we decide to cap membership.
Stay on your toes and have a good one.
Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.
To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)
For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.
For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.
Purchased 100 contracts of Silver Wheaton Corporation (SLW) March 2011, Call Options, strike price of $42.00 for $3.30 for a cost of $33,000.00.
We reserve the right to trade this position as we feel fit and have not limited ourselves by any rules other then our intention is to roll the proceeds into the next trade. We have set a target of making one million dollars at which point the accumulator will be closed. At any time throughout this little venture we may decide otherwise and close it down. These are real trades with real cash so the maximum we can lose is this stake.
Should it be a disaster then its back to the drawing board for us.
Our normal trading activity will carry on as per usual.
This exercise is not part of anything that the www.skoptionstrading.com chooses to do.
Please regard as a bit of fun where we get to sweat and you get to chuckle.
Your decisions and your operating criteria is exactly that, its yours, your responsibility, you are accountable for your own actions.
The use of both stocks and options trades will form the basis for this exercise.
At times it may be difficult to purchase the number of contracts that we need in order to deploy all of the cash so we may need to buy a tranche of options on any given trading day. Hopefully we can dispose of them in one trade but again we may need a little time to complete the move.
The idea is to have some fun with it as we are sure it will make us laugh and cry. And this is definitely not something that you should try at home, got that, good.
For instance, if we start with $15,625 and were to achieve a 100% profit in 7 straight trades then the Accumulator would generate $1000,000.
$15,625
$31,250
$62,500
$125,000
$250,000
$500.000
$1000,000
The probability of this being achieved is just about nil as any speculator will tell you.
We have thought about a few names, such as the $1000,000 Accumulator, or how I lost my shirt, etc, but will stick with The Accumulator.
We do not have a time frame for this exercise and we will not be rushed into making a trade just for the sake of doing so.
We may utilize all three sites, gold, silver and uranium but we will keep a summary of the trades at www.silver-prices.net which we will update as we trade.
We may also lose our nerve if and when the numbers get too high and the trade looks to be going against us, so we would have to settle for less or we could get stopped out etc. Having to place the total amount into the next trade will also test our emotions to the limit. However, if we start small then that is the maximum amount of money that we can lose.
Over in the options trading pit, we had a number of stops triggered , but we walked away with an average gain of 32.7% so we now have 59 winners out of 61 trades, or a 96.72% success rate.
The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.
So, the question is: Are you going to make the decision to join us today, before we decide to cap membership.
Stay on your toes and have a good one.
Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.
To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)
For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.
For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.
Reader Comments (25)
I don`t see how a 100 contracts @$3.30 can come to $33000.00
Have I misunderstood what comprises a contract?
Good luck. I'd sell some higher strikes against the position. Sure, it'd take longer to hit your target, but you'd increase the likelihood you'll get there. In fact, I'd say it would make it likely.
You've picked a good underlying.
This could work. Wouldn't that be a hoot?
Gee Haw!
Yes. It's $3.30 per share and each option represents the right to buy 100 shares at the strike price. So, it's $3.30 x 100 shares x 100 options = $33,000.
That's a lot. Yikes!
Peter,
One contract is 100 shares.
So, we have 100 contracts X 100 shares X $3.30 = $33,000.00.
On these, you notify after the fact or next day?
Indeed, sometimes we buy late in the session but we do publish the move immediately. However, Feedburner only transmits our letter once a day. You could get an RSS feed or pop in more often if you wish.
Overall though it should not make a lot of difference, in fact you can buy them a lot cheaper today as silver was taken down.
i either didn't see this on the newsletter or i haven't opened everything that has come in.
explain the 'accumulator' to me?
P,
Please read the past posts on the Accumulator, they should explain what we are doing and remember that this is a 'fun' thing and nothing more.
May I suggest something that you may have thought about. The suggestion is that you have a list of the email addresses of specifically interested followers and send a group email out immediately to those names. Following that you then could send the same info out via Feedburner to the general readers to keep them up to speed. The quick distribution of information is of the essence for those in the game. The question then is what to do if the preferred list gets too big.
John
Kinda like playing Russian Roulette with the seller, using an eight shot revolver. 7 times lucky? This is going to be good. Good luck trying to sleep at night.
John,
We do that on our premium service, the emails go out in real time while the exchange is open, but we just cant afford to do it on this site.
Hi
I certainly hope that you will use a number of stocks in the Accumulator for us folks who do not know about Option trades
What do you think about those of us who nothing about options just call our brokers and give them those instructions from you emails to buy and sell?? Is this a crazy idea or not????
Your input would be appreciated
Best regards
SLW looks tempting at this point.
I'm taking this challenge, but on a smaller scale. I'm in for 5 contracts @ $2.60/per. I'm looking to average down for another 5. Turk made a good call on $30 silver in early December. I hope he's right about $1800 gold in Q1 '11.
Bee,
We hope that he is right too! There must be a million plays this one so it'll be interesting reading as go along, good luck with your trade.
SLW stock price manipulation? How about that last minute takedown on Friday.
Order filled for 5 contracts @ $2.05 for and average in price of 10 @ $2.325.
When does SLW report year end financials? I bet that will be the day to have March calls. Until then, I'm waiting for the Boxing week special. Have you seen the 2 yr chart on Randgold? Head and shoulder and a cross over. Yikes!!! Sitting on a few in the money puts.
Sounds like fun, I'm in for 180 contracts....
That whistling sound is my testicles retracting at warp 6.
Onwards and upwards, its gotta be worth a laff.
Hi Gents,
Back after a 6 month hiatus...now this is a good idea, I understand fully what you are trying to achieve here, but I would hedge and invest only 50% of the proceeds from past picks.
I'm in with 5 contracts purchased today at $1.70.
A bit of a Christmas discount from your original purchase at $3.30.
Thank you Silver-Prices for your solid picks in 2010!
Everybody, I wish you all a Great and Merry Christmas and Very Healthy and Prosperous New Year!!
Good Day Team,
Slw closed at $39.04 on the back of a move by silver prices to $30.91, however, our options are still under water so we are looking for some very positive action as the year opens with the PMs taking centre stage.
All the best,
Bob
Ouchie. The Silver Prices team got in at 3.30 per option. I hate to look what it is now myself. The good news is that $35 SLW may provide price support.
oh the problem with posting when you buy, especially after a big run up in the silver price (July-Dec)...The guys at SilverPrices have had an outstanding year and deserve credit for their picks and offering an opportunity to increase everyone's bottom line with options.
If all of us are investing alongside them we should always remember what SilverPrices say about individual tolerance to risk first and not project (dream) about what amount of money we can make from a single trade - that's gambling - because anything can and will happen...I figure out what amount (up to 5% of total portfolio) of my money to invest and stick with this amount on every trade.
the result - head and gut are ok and I sleep like a baby.
It may be over:
http://www.kitco.com/reports/KitcoNewsMarketNuggets20110106.html
If silver can hold 36.25 today, this correction may be over. Yeehaw!