Investment Review №332. The Bulls switched to big tech
LONG CALL ON NEM
Investment Rationale
Newmont Corporation (NEM) — the largest public gold producer with a diversified portfolio of mines across the Americas, Australia and Africa. The company combines scale of production, active monetization of non-core assets and authorized share buybacks, which, against the backdrop of elevated gold prices, support cash flow and shareholder returns.
Investment Idea
Buy the $82.5 call as a speculative bullish bet on the combination of (1) today’s high gold prices supporting miners’ cash flow and margins; (2) proceeds from divestitures and buyback programs that reinforce valuation support; and (3) a technical catalyst — the potential bounce of the gold futures contract from its 50-day moving average, which could quickly lift both spot gold and major miners’ shares.
Key Arguments
- High gold price base and cash-flow impact. At current levels, gold meaningfully improves Newmont’s margin and free cash flow, enabling accelerated buybacks and dividend capacity — a pro-valuation dynamic.
- Divestiture proceeds and capital discipline. Newmont has already realized part of its divestiture pool and plans further asset sales, providing cash for buybacks and deleveraging; this reduces financial leverage risk and supports the multiple.
- Technical catalyst on gold. Gold futures are trading near the 50-day moving average — a common institutional accumulation zone; a bounce from that level is plausible and could rapidly amplify upside in both spot metal and large-cap miners.
| Strategy | Long Call |
| Ticker of the Underlying | NEM |
| Recommendation | BUY |
| Strike and Option Type | CALL $82,5 |
| Expiration Date | 16.01.2026 |
| Current Price (Mid) | 4,475 |
| Strategy Cost | $447,50 |
| Greek Parameters | Delta – 0,451 Gamma – 0,027 Vega — 0,143 Theta – -0,043 |
| Implied Volatility | 41,64% |
| Realized | 1М – 62,91% 3М – 41,93% 6М – 40,25% 12М – 39,12% |
P/L of the option strategy
Trade Parameters
| Strategy | Long Call on NEM |
| Strike | Long CALL 82,5 |
| Buying | +NEM*G1G82,5 |
| Exp Date | 16.01.2026 |
| Margin Requirement | $448 |
| Entry Price | $900 |
| Max Prifit | $Inf |
| Max Loss | $(448) |
| Expected return | 101% |
| Breakeven Point | $86,98 |
Position Management
If on the expiration date of January 16, 2026, the underlying asset’s price is above $82,5 but below $86,98, the investor will incur a variable loss. If the underlying asset’s price falls below $82,5, the investor will face the maximum loss of $488. If the underlying asset’s price rises above the breakeven point of $86,98, the potential profit is unlimited. However, we recommend closing the position once the call option reaches a value of $900.