LGL closed at 3.19 in US on Friday in the aDR's so when it...

LGL closed at 3.19 in US on Friday in the aDR's so when it dipped to $3.17 today with gold edging up I bought another 500 $3.00 calls. I can afford to exercise but I'm still looking for gold to move to $920 (which should give me $3.30 on LGL) and then a move to $950 and a pause (which may get me to $3.50 on LGL and ex Mercedes ("a purple sports one" I'm told) at which I reduce my massive exposures but retain a normal one as I stil think we can see $4.00 this calendar year plus I have a ratio running so I need stock above $4.00 this year. 35m traded today and with sentiment on inflation building this is a reasonable chance of a rebound to a $3.50 expiry on the 29th.

On the may and June puts, they are leveraged beyond my present means to take them up but if only modestly. The money to take them up went into MQG. I tend to play a Rawhide strategy (rolling rolling the puts) except for the $4.00 puts that I am treating as stock (with some calls covering the possibility it gaps up to $4.50!

Your strategy of long stock short 50% calls sounds very sensible over past few months given high implied vol and retain siome upside (reason for me trading LGL in the first place) although given present situation I would roll from May to longer dated call (say Nov) because of rising gamma working against you, or close the call and await move to $3.50 and reinstate. I sold to open my May 3.l50 straddle position in November 2007 receiving 68 cents. Its been a roller coaster but if you can ignore it for several months you get the time erosion and then finesse the closings as I am doing now. Risk is a big drop in the stock so in the money puts get assigned towards expiry, which always happens just as the stock is poised to bounce so you need to be able to absorb those ones.

Trading in retirement has frightening possibilities in terms of upside compared with working in the industry and being unable to do things for fear of conflicts. I'm also so relaxed again when markets go temporarily against me, its like when I was a gunslinger in my twenties. I'm globally up 50% since April 1, my best effort for many years and mostly in blue chips. EMED is up to 30p high today (27p Friday) on their way to 50p+ and its a no brainer based on what they have already.