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« The Accumulator Trade 1 Update 03 March 2011: Position Closed | Main | The Accumulator Trade 1 Update 01 March 2011 »

The Accumulator Trade 1 Update 02 March 2011

Silver Wheaton Corporation (SLW)  added another 2.42% today to close at $43.58, affording us the opportunity to dispose of 50 contracts at $2.89. These are the March 2011, Call Options, at a strike price of $42.00 for which we paid an average cost to $2.19 per contract, so today's profit was in the region of 32%.

Yesterday we disposed of the first 100 contracts for a smaller profit of around 5%.

We now have 50 contracts remaining and we may dispose of these contracts tomorrow as the expiry date is only 18 days away and the market is rising.

Its difficult to be more precise as the time erosion and a sudden pull back in silver prices would place these contracts right back in the hole from which we are just managing to extricate ourselves. Hopefully we can wrap this one up shortly and then move on to the next trade.

Option trading isn't easy and this one has been particularly difficult as silver prices turned against us more or less from the outset and so we have been behind the curve for some considerable time. When your position gets hammered its an emotional bloody nose for you and feel like something that the dog has dragged in. To handle it, you first of all need to expect it and mentally prepare yourself for the violent oscillations of options trading and secondly never put in more cash than you can afford to lose. When you are ready to make a purchase, sit back and imagine the Armageddon scenario for your trade. If it really hurts then you have put too much money at risk so reduce the number of contracts that you are buying until you can manage it.

Also be prepared to sit through the attacks from both the bears and the bulls, both have huge resources at their disposal and they wont hesitate to hit it hard and fast when we least expect it.

We would also remind you that we did say don’t try this at home, its meant to be a fun thing where you get to chuckle at our efforts and we get to sweat.

Until tomorrow then.

PS: Just in case you missed it we have just closed an option play on with an average profit of 96.5% on Silver Wheaton Call Options. Click here to read more.

Many thanks to those of you who have recently signed up for options trading service, its very much appreciated. Please be patient as we have a number of new trades on the drawing board and as you are aware the timing of them is critical to their success.

We now have 65 winners out of 67 options trades, or a 97.00% success rate If you have any questions regarding these trades please address them through their site where they will be handled quickly and I hope efficiently.

sk chart 19 Feb 2011.JPG

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)

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