GDXJ Jul 2020 47.000 call

OPR - OPR Delayed Price. Currency in USD
6.05
0.00 (0.00%)
As of 3:31PM EDT. Market open.
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Previous Close6.05
Open5.80
Bid0.00
Ask0.00
Strike47.00
Expire Date2020-07-17
Day's Range5.59 - 6.05
Contract RangeN/A
Volume21
Open InterestN/A
  • Be Careful Using Leveraged JNUG Stock to Buy Gold
    InvestorPlace

    Be Careful Using Leveraged JNUG Stock to Buy Gold

    In 2020, one of the most trusted asset classes has possibly been gold, with the shiny metal up about 13%. One way to play the recent gold rush is a leveraged exchange traded fund, such the Direxion Daily Jr. Gold Miners Bull 2X ETF (NYSEARCA:JNUG). Year-to-date, JNUG stock is down about 87%.Source: Shutterstock JNUG tracks the MVIS Global Junior Gold Miners Index (MVGDXJ). And it seeks a 200% or -200%, i.e., 2X, of the return of this benchmark index for a single day. This daily leverage gives JNUG certain characteristics that may make it a rather inappropriate long-term holding for most retail investors.Let's see why.InvestorPlace - Stock Market News, Stock Advice & Trading Tips JNUG Stock is a Leveraged ETF (LTEF)Many investors are familiar with a wide range of exchange traded funds that enable them to track the price of the commodity. Examples include the SPDR Gold Shares (NYSEARCA:GLD) or SPDR Gold MiniShares SPDR Gold MiniShares (NYSEARCA:GLDM). Year-to-date, they are up 14% each.There are also investment funds that invest in various miners, such as the VanEck Vectors Gold Miners ETF (NYSEARCA:GDX) or the VanEck Vectors Junior Gold Miners ETF (NYSEARCA:GDXJ). In 2020, they are up 23% and 12% respectively. * 7 Excellent Penny Stocks Ready to RoarIt is important to remember that JNUG stock is a leveraged exchange traded fund (LTEF). Two of the most popular LTEFs include JNUG and the Direxion Daily Gold Miners Bull 2X ETF (NYSEARCA:NUGT). And leverage makes the long-term performance of both JNUG and NUGT differ than the performance of the underlying assets. Similar to JNUG stock, NUGT is also down 55% so far in the year.Put another way, although GLD, GLDM, GDX and GDXY are up considerably so far in 2020, the same is not true for either JNUG or NUGT. Similarly, MVGDXJ, the index that JNUG tracks is up 13% in 2020.Over the past five months, these leveraged exchange-traded funds have not at all performed like the ETFs that track either the commodity of various gold miners.This discrepancy in long-term returns is due to the daily leverage used. How Leveraged ETFs WorkA 2X leveraged ETF like JNUG stock is structured to be constantly 2X leveraged on a daily basis. This 2X long LTEF needs to buy every day underlying asset prices go up, and sell when they go down.The leverage is achieved through the use of rather sophisticated financial instruments, such as swaps, futures, and options. However, the daily resetting involved in JNUG stock is rather complex and makes it a no-go as a long-term holding. The compounding effects of daily returns work against long-term investors.JNUG stock also has a "bear inverse" ETF, i.e., Direxion Daily Jr. Gold Miners Bear 2X ETF (NYSEARCA:JDST). Simply stated, JNUG stock is 2X bull and JDST stock is 2X bear.Let's compare the performance of both indices as of March 31, 2020: * 5-year return: JNUG -52.90% and JDST -80.37% (i.e., both returns are negative) * 3-year return: JNUG -68.8% and JDST -63.7% (i.e., both returns are negative) * 1-year return: JNUG -92.0% and JDST down -92.8% (i.e., both returns are negative)In theory, short-term (possibly day) traders could consider JNUG stock to go long smaller gold miners and JDST to go short.But looking at the performance over time, long-term traders should not consider JNUG stock to go long. Instead it looks as a vehicle of wealth destruction. How is that possible?Let's see an example. For example, if the underlying index MVGDXJ moves down 5% on a given day, then JNUG stock should move down 10%. If we assume a stock price of $10, JNUG should be down to about $9 after the first day.On the second day, if the MVGDXJ moves up 5%, over the two days the MVGDXJ return will be -0.25%. A long-term retail investor may think JNUG should be down 0.5%. Yet, the 10% increase on day two will bring shares up from $9 to $9.90, and the JNUG stock would, in reality, be down by 1%.And any investor who holds these leveraged ETFs for a long-period will find out that his or her capital would eventually be eaten up by this volatility and daily re-balancing. Thus JNUG stock can only be appropriate for experienced short-term traders looking for leverage and volatility. The Bottom Line on JNUG StockBefore you decide to buy leveraged ETFs, such as JNUG stock, it'd be extremely important to understand how they work, with an emphasis on their drawbacks. The use of leverage as well as volatility give their unique properties to these funds. Gold is quite a volatile commodity, and gold miners are a leveraged play on gold prices.Therefore, the long run returns of a 2X ETF like JNUG stock are rather dangerous and unpredictable. Even if the underlying index moves in favor of the LTEF, JNUG stock might still lose considerable value over the long term.As you increase your knowledge base on these leveraged exchange-traded funds, you may quickly realize that LETFs are likely to be more appropriate for professional traders for hedging purposes than buy-and-hold retail investors.Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation. As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * America's Richest ZIP Code Holds Shocking Secret * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post Be Careful Using Leveraged JNUG Stock to Buy Gold appeared first on InvestorPlace.

  • Gold ETFs Take A Bow
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    Markets Tight-Ranged Except for Silver and Gold

    Stocks, bonds, currencies, and commodity markets traded nearly unchanged during the hours of yesterday's abbreviated session at the New York Stock Exchange. The price of silver and gold were notable exceptions, however, as these markets broke significantly higher. The price of silver rose nearly 2%, while gold increased by 1%.

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    Be Cautious With This Small-Cap Miners ETF

    Gold prices remained steady last Friday following a strong October jobs report and that should benefit mining ETFs, including the VanEck Gold Miners ETF (GDX B+) and the VanEck Vectors Gold Miners ETF (GDXJ B).

  • ETF Trends

    Be Careful With This Small-Cap Miners ETF

    Gold prices remained steady last Friday following a strong October jobs report and that should benefit mining ETFs, including the VanEck Gold Miners ETF (GDX) and the VanEck Vectors Gold Miners ETF (GDXJ) . The prognosis is interesting when considering GDXJ jumped more than 4% in October, but the fund traded slightly lower last Friday. Some analysts also argued that precious metals found further support from risks of a global economic slowdown and expectations that the Federal Reserve will implement more interest rate cuts to offset the growth concerns.

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  • Kinross Gold Corporation Stock Seems Ready for a Long-Term Uptrend
    InvestorPlace

    Kinross Gold Corporation Stock Seems Ready for a Long-Term Uptrend

    In the last 12 months, Kinross Gold Corporation (NYSE:KGC) stock has surged by more than 80%. The upside in KGC stock has been backed by strong fundamental developments. Comparatively, the VanEck Vectors Junior Gold Miners ETF (NYSEArca:GDXJ) is up 52% in the same period. Even after the sharp rally, I believe that the uptrend has just started for KGC.Source: Shutterstock At this point, I am recommending investors accumulate positions in Kinross Gold with an initial investment horizon of 12-24 months.My recommendation on KGC stock is predicated on both industry and company specific factors that back my bullish view. Kinross stock, at a 6.34% weighting, is the largest of 67 holdings in the GDXJ mining stocks portfolio.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Bullish on GoldIt is important to understand that movement in gold mining stocks is closely linked to trend in gold prices. It is therefore important to discuss the likely trend for the precious metal before talking about company specific factors.Gold is currently trading at $1,536 and is higher by 20% for year-to-date 2019. The break-out in gold prices has come after nearly five years of sideways-to-lower movement. I believe this was a consolidation zone for gold. Levels of $1,200 to $1,300 an ounce can be considered as a region of strong technical support.I am of the opinion that gold will sustain at higher levels and can potentially break all-time highs in the next 12-24 months.The most important reason for this view is global economic weakness. For August 2019, the manufacturing sector in the United States contracted for the first time in three years. China has also reported lowest GDP growth in almost three decades. Concerns of weak growth and potential recession loom at large even for Europe. Amidst these economic concerns and the ongoing trade war, the precious metal is likely to outperform. * The 8 Worst Stocks to Buy Before the Trade Turmoil Cools Off Consider the following three factors:The U.S. is already pursuing expansionary monetary policy and as money supply increases, the dollar is likely to trend lower. This is positive for gold.With economic concerns, there is increasing risk-off trade and investors seek to go overweight on Treasuries and gold. The precious metal is likely to see higher investment demand.Central banks of Russia and China have been aggressively buying gold to diversify reserves. With weak economic growth, expansionary monetary policies and geo-political tensions, demand for gold from central banks will sustain.In sum, the global economic scenario is perfect for gold to trend higher after prolonged consolidation. Kinross Gold stock will move in-sync with gold prices. EBITDA Margin Expansion and Cash Flow GrowthFor the second quarter of 2019, KGC reported average realized gold price of $1,307 an ounce. For the same period, the all-in-sustaining-cost (AISC) was $918 an ounce. This translated into an adjusted operating cash flow of $287.7 million for the quarter.With gold already at $1,530 an ounce, the realized price will significantly increase in the coming quarters with the AISC remaining largely the same. The positive implication is EBITDA margin expansion and growth in operating cash flows.If gold sustains above $1,500 an ounce (very likely), annualized operating cash flow can be in the region of $1.5 to $1.8 billion. As Kinross Gold Corporation generates positive free cash flows, the stock is likely to trend higher.From the perspective of AISC, Kinross has agreed to acquire Chulbatkan, a development project. The asset has an indicated resource of approximately 3.9 million ounces of gold. Importantly, the company expects AISC for the project at $550 an ounce.Therefore, as the project commences production in the coming years, the company-wide AISC will decline and EBITDA margin expand.As a matter of fact, Kinross has a relatively attractive AISC for American and Russian assets. The AISC for West Africa is higher. I expect inorganic growth to be focused on assets in Russia and the U.S. Strong Fundamentals for Aggressive GrowthAs gold trends higher, it makes more sense to ramp-up production for higher realized gold price. KGC has the advantage of a strong balance sheet to pursue organic and inorganic growth. * 7 Best Tech Stocks to Buy Right Now As of June 2019, the company had total liquidity buffer of $1.9 billion. With likely expansion in free cash flow in the coming quarters, I expect the liquidity to swell and net debt to decline.In addition, I expect stock re-rating if gold continues to trade above $1,500 an ounce. This re-rating expectation is based on potential dividends as free cash flow swells. Final Words on KGC StockKinross Gold Corporation stock has surged in 2019 with gold trending higher, event in the 17.1% gain for the largest physical gold exchange-traded fund, SPDR Gold Trust (NYSEArca:GLD). The company is also on track to meet 2019 guidance on production and that has kept the KGC stock momentum bullish.The key trigger for sustained stock upside is EBITDA margin expansion and cash flow growth in the coming quarters. In addition, I expect relatively aggressive investments to prop-up production growth in 2020 and 2021.The factors discussed make KGC stock an attractive buy even after the sharp rally. A 5% to 10% correction on profit booking is entirely likely and I see that as an opportunity to accumulate the stock.As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post Kinross Gold Corporation Stock Seems Ready for a Long-Term Uptrend appeared first on InvestorPlace.

  • This Gold ETF Helps Nervous Investors Sleep During Troubled Times
    Investor's Business Daily

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    When global markets are wracked with turmoil, investors often turn to that old standby: Gold, or a gold ETF. Like VanEck Vectors Junior Gold Miner ETF.

  • 5 Gold Mining ETFs & Stocks Outperforming in August
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    Trade has played foul on Wall Street throughout August, sending the broad indices into a tailspin, thus compelling investors to flock to gold as a great store of value and hedge against market turmoil.

  • 5 Gold Mining ETFs & Stocks Shining in August
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  • K92 Mining Is a Buy
    GuruFocus.com

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    Precious Metals Miner ETFs Surge as Gold, Silver Fuel Safe-Haven Bets

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    Gold ETFs Rally After Trump Threatens New Tariffs

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  • Gold Mining ETF (GDXJ) Hits New 52-Week High
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    Another Plus For Gold Miners ETFs

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