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Message: GDX puts

Re: GDX puts

in response to by
posted on Jan 27, 2010 12:05PM

Klaus, This is a good strategy especially GDX is oversold and at critical support. It can still break to 40.

But should be prepared to take assignment. Upon assignment, buy a put at 40 to protect and sell a call. This is a collar. If stock rebounds upon hitting 40, sell the put. If it moves down, your loss will be minimal. The probability of bouncing back at 40 is very high once you take assignment.

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