What’s Up with Gold Companies and Their Stock Options?

Barrick Gold (ABX), Anglogold Ashanti (AU) and Harmony Gold Mining (HMY) stock option volumes are sky high today.

Barrick Gold is Canadian based company primarily involved in searching for and producing gold. Barrick is also involved in copper, silver, platinum, nickel, oil and gas.

AngloGold Ashanti is a South African based company primarily involved in mining and production of gold in South Africa. AngloGold also has mining operations in other parts of the globe as well.

Harmony Gold is also based in South Africa and is primarily involved in the gold mining business.

All three of the company’s stock has performed well over the last year and each one of the stocks has broken through its previous support level.

The price of gold has been roaring over the last year from the low $700’s/oz to over $1050/oz. The stocks of each of these companies will have a similar performance to the price of gold.

If inflation starts to rear its ugly head, the price of gold will go into orbit as will the stock of these companies. An investment in these companies could be a good hedge against inflation. The high call option volume for these companies seems to suggest the stock market thinks inflation may be lurking around the corner.

A covered call investing position for one of these companies cold be a good play. Of the three Barrick Gold has the most attractive covered call position for November with a potential return of 4.5%. The other companies have covered call positions available which are very comparable, but with just slightly less potential return. The call option to sell for this covered call investing position is the November 39 with ticker symbol ABXKC.

To enter the covered call investing position an investor would purchase the stocks in multiples of 100 shares for their trading portfolio and sell one call option for each 100 shares of stock purchased for their personal stock portfolio.

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[tags] Canadian, gold, copper, silver, platinum, nickel, oil, gas, South Africa, mining, inflation, ABX, Barrick Gold Corp., AU, Anglogold Ashanti Ltd., HMY, Harmony Gold Mining Co. Ltd. [/tags]