Bought 3 ABX 10OCT Puts 46.00 @ 4.00, Mark $44.67

Right on the heel of my oil short loss, I am taking another stab at shorting the market. This one is Barrick Gold (ABX.TO). I am moving away from shorting financials because the puts premium are almost doubled that of the calls! It seems that too many people are betting the banks will take a hit in the next fall.

In the long term, ABX.TO appears to be in an up trend. However, the intermediate trend is turning negative as shown in Figure 1. $45 is an obvious resistance for ABX.TO. Even with today’s positive market moves, ABX.TO fail to catch on the bullish wave and only touched $44.86 in the morning optimism (Figure 2). Who knows, perhaps it might break it sooner than later. But the reward/risk is decent to short ABX.TO seeing that the $45 resistance is right above.

Barrick Gold (ABX.TO)

I will give it a month’s time to move below $44.00. Worst case stop loss is $2.50 on the premium. That is ($2.50 – $4.00) x 100 x 3 = -$450 – $12.95 x 2 = $475.90 = 5% of account total. My mental stop is $3.00 on the premium. Which is about 3.3% of my account total.

ABX.TO intraday

Related posts:

1. Bought 3 CM.TO 10Oct Puts @ 5.00, Mark $74.02
2. Bought 4 MFC 10OCT Puts 17.00 @ $1.48, Mark $16.38
3. Bought 3 CM 10OCT Puts 74.00 @ 5.65, Mark 72.30
4. Sold 3 ABX 10OCT Puts 46.00 @ $4.15, Mark $43.97, Breakeven exit
5. Bought 3 PAA.TO 10DEC Puts 25.00 @ $2.27, Mark $24.75