Replies to post #1821 on Gold Resource Corp (GORO)

[orion1]

well, not exactly.
the ask for june 20 calls is now 7.5(25.5 +2 dollar premium)
The closer to the expiration date the lower the premium.

If Goro trades June 18 at 27.5, you break even (minus your trade comission)

Let's do an example.

you buy 100 contracts (the right, not the obligation, to buy 10000shares at $20) for 7.5
7.5*100*100=75000
In Januari, Goro trades at 30.
You can sell your contracts for 10(30-20) + premium(probably ~$1)=11
11*100*100=110000.
That's 35000 gain (- short term taxes)

if Goro trades at 30 by the expiration date the premium will be nill, so you will have 10*100*100.

Hope this helps, but please do some reading this weekend before you jump in.