Mine, All Mine

Volatility in the precious metals and miners has made the last month feel like a year's worth of action. On July 12, I posted a short miners put portfolio. I was looking to take advantage of the across-the-board selloff in the miners regardless of the fundamental picture. Everyone in the group was hit hard. Still, a few names in the group seemed to offer attractive risk-reward.

My focus was shorting the January puts on Yamana Gold (AUY), Coeur D'Alene (CDE), Goldcorp (GG), IAMGOLD (IAG), Pan American Silver (PAAS) and Standard Silver Resources (SSRI). I tried to build in 20% to 25% of downside protection. It's only a month later and I clearly didn't need 20% or 25% of downside protection. In fact, I may have gone too conservative on the group. Selling one put from each name netted $5.11 in premium. The cash needed to support the sale of one each totaled $5,339, so a $511 return on a $5,339 risk for six months was attractive, but right now, it isn't as attractive. Why?...115 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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