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przemyslaw-radomski

Is it OK to be ultra bullish on precious metals and take huge speculative positions?

November 16, 2012, 12:00 PM Przemysław Radomski , CFA

I appreciate your earlier email and plan on subscribing to your market letter for 1 month and then will go from there.

Because I'm so ultra bullish on precious metal stocks for at least another month, I've decided to go whole hog on out of the money mining stocks options.

If I'm wrong, then I just blew $5k!

I'm very happy to hear that you like our service. Please keep in mind that the size of the speculative position should be small relative to the value of one's total precious metals portfolio, especially if the position is heavily leveraged (which is the case with short-term options). Not losing capital is ultimately more important than gaining it, so be sure not to overdo your trading even if the situation is as bullish as it is right now (and we agree that the case for metals looks very favorable). Years of experience simply suggest caution regardless of how great the situation might look. You will find more information on trade size in the Portfolio Structuring report (click on the pictures at the bottom of the essay) and you will find an in-depth discussion of the reasoning behind relatively small trade size in "The Universal Investor" report.

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