HAL9000

Take advantage of volatility spike: Sell puts.

NYSE:GG   GOLDCORP INC NEW
2 months ago
FUNDAMENTALLY COMPELLING
BUY rated by the consensus
+47% average target upside
Morningstar             rating * * * *

TECHNICALLY: COULD BE REBOUNDING SOON?
GG             is down 35% since the intermediate top above $20 reached in early July
This is 2.5X more than the consolidation in Gold             (-13.74% since July)
Such negative performance has brought a spike in volatility
The stock has also just completed a perfect rounding top
It has also been forming a consolidation base at 12.65
Too early to buy outright, as the direction in Gold             needs confirmation
However...

...OPTIONS STRATEGY TO TAKE ADVANTAGE OF VOLATILITY: SELL (SHORT-DATED) OTM PUTS

FOR AGGRESSIVE TRADERS
Sell 16Dec16 $13 put at $0.32/share (indicative) for a yield of 2.38% (54.32% annualized)

FOR MORE RISK AVERSE INVESTORS
Sell 21Apr17 $12 put at $0.79/share (indicative) for a yield of 5.88% (15.11% annualized)
2 months ago
Comment: For reference, sold 20jan17 $12 put at $0.43/share (3.2%, 22.90% annualized).
a month ago
Trade active: The weakness in gold post Fed meeting presented us yesterday with yet another volatility opportunity to sell puts on Goldcorp, as the stock went down 10% in 24h. Yesterday, the 21Apr17 $11 put yielded intraday as much as 19% annualized ($0.80/share). Under the worst case scenario, we would be happy to be long GG at $11 for a longer-term pickup in gold prices. The $12 support played its role perfectly yesterday, as the stock breached it intraday but closed comfortably above it. Those who were assigned on the 16dec16 $13 put sale should hold on to the shares.
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