Take advantage of volatility spike: Sell puts.

Nov 30, 2016

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)

Nov 30, 2016

Note

For reference, sold 20jan17 $12 put at 0.43/share (3.2%, 22.90% annualized).

Dec 16, 2016

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.