On Wed January 11, I suggested selling 40 contracts on the Feb 18 4 puts on Hecla Mining (HL) for .25 cents a contract. http://optionshoney.com/2012/01/11/hecla-mining-pounded-on-huge-volume-lets-mine-the-honey-with-options/. This was a play on high volatility and a huge sell off in HL that I felt was overdone. Fortunately, HL shares are bouncing 5% higher today on big volume and that is excellent for the puts we sold!!! Today, we can buy to cover that option position for .11 cents a contract with a gross gain of 56% or $560 on 40 contracts. Honey Bees, let’s lock in our profits and look for the next play on HL from the sideline.
Trade#2 on January 11th is also working well today…Feeling the Buzz yet?! If we had bought the HL MAR 17 2012 5 calls for .30 cents, they are trading up 53.33% at .46 cents today. Lets take 5 contracts off the table for a gain of $80 less commissions and ride out the remaining 5. For the gambler wanting to roll the dice, we could just let all 10 contracts ride….If HL shares continue to bounce higher, these 5 calls could run to 70-80 cents in just a few days. But, often it is smart to lock in part or all of our profits on winning trades quickly…And always remember that pigs get slaughtered in the Options game all the time. Volatility is our friend and sometimes our enemy. Class dismissed…
5 day Chart source: Fidelity Investments
—Timmy B
optionshoney
Option$honey 
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