Scrap Metal Options Trade : Small Time Blog

Scrap Metal Options Trade

by Bradley Voight on 08/19/13

I went to the scrap yard last week just to make some room in the garage. I made $72 for some cans, insulated wire, and 200 pounds of iron. On Monday I bought 2 call option contracts for September on a company called Halcon Resources, an oil driller in the Bakkan shale in North Dakota. On Friday August 8 company insiders purchased 610,000 shares @ $5.10 worth over 2 million dollars. Even the human resources vice president bought 20,000 shares. I splurged, I bought 2 call option contracts for 30 bucks. Each contract represents the right but not the obligation to buy 100 shares of the stock at the strike price at a future date, which I chose as $6. You can click here to see the September options for Halcon on Yahoo finance. The options expire Septermber 21, which means they either have to be exercised or sold by that date. I plan to sell them before expiration as I do not have $1200 it would cost to buy 200 shares @ $6 apiece. The reasoning behind my purchase is that I think the insider buying and the large number of open call contracts in September, October, and beyond signify a coming move to the upside in the stock price. I just hope the move happens in September.


It took me 2 years to learn about options before I made a trade and I have had just one winner out of 5 but it was a triple and it covered 75% of the losses on the others. The first few trades were made before I should have been trading options. I don't trade options willy nilly but only if I think there is enough information to signify a large and sudden move in a given stocks price in either direction (you can buy put options if you think a stocks price is going to fall) I am not suggesting that anyone buy options until they fully understand them. I am not a financial professional and I am not a financial adviser and I hold no licenses or permits to sell or recommend any financial instruments. I am simply trying to illustrate an alternative way to take some of the money I earned from selling scrap metal and attempt to multiply said money. Stay tuned to find out if I am successful in my endeavor.

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Disclaimer: This is not investment advice as I am neither licensed nor qualified to advise anyone's financial decisions. It is a site presenting an "out of the box" set of ideas on how to possibly maximize profit from recycling, creating an incentive for people to recycle. Smalltimerecycling.com and I Brad Voight are not responsible for any losses incurred from tips or suggestions presented on Smalltimrecycling.com, they are simply my own opinions and I encourage you to form your own opinions.
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