Dig up Profits in Newmont Mining Options

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Newmont Mining (NYSE:NEM), together with its subsidiaries, engages in the acquisition, exploration and production of gold and copper properties. The company’s assets or operations are located in the United States, Australia, Peru, Indonesia, Ghana, New Zealand and Mexico. As of Dec. 31, 2011, it had proven and probable gold reserves of approximately 98.8 million ounces and an aggregate land position of approximately 31,500 square miles.

Gold prices, which have been under pressure of late, appear to have found some support at the $1,640 level. Gold stocks have been big underperformers to physical gold, with NEM now trading at the cheapest to physical Gold since August 2011. This proved a prescient point to take a long position in NEM, with the stock rallying nearly 20% in the subsequent three months.

NEM has dropped from $64 to around $54 over the past month, or 16%. The stock seems to have bounced off solid long-term support at the $52.50 area, which coincidentally also was August 2011.

With my bullish viewpoint on gold and gold stocks at these levels, I look for NEM to move back to $60 by June expiration.

Based on Newmont Mining’s current market price of $53.84 and using a target price of $60, a target date of June 15, 2012, and $1,000 of investment capital, you can capture some nice gains by buying a call butterfly, buying a call spread, selling a put spread or using another options strategy that best fits your trading style and goals.

For the full details on this trade, visit TradingBlock.com, create a free Instant Login and try the TradeBuilder feature, where you’ll see several ways to trade this name. Best of all, you can see a potential profit-and-loss outline for each strategy.

Create your free login, and get access to the details about these NEM options trading strategies by visiting the TradeBuilder here.

Tim spent 13 years as Chief Options Strategist at Man Securities in Chicago, four years as Lead Options Strategist at ThinkorSwim and three years as a Market Maker for First Options in Chicago. Tim makes weekly appearances on Bloomberg TV  “Options Insight”, Business First AM “Trader Talk”, TD Ameritade Network “Morning Trade Live” and CBOE-TV “Vol 411” to discuss everything from volatility and option related.


Article printed from InvestorPlace Media, https://investorplace.com/2012/03/newmont-mining-nem-options/.

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