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Buy Call VALE

January 10, 2022
Sell a Third of Existing Position: Sell a Third of your VALE June 17 Calls for $2.15 or more.

Vale (VALE) is breaking out to a new high today, which is helping push our recently purchased June 17 calls to a potential profit of approximately 20%. Let’s stick to the program, lock in a profit, and then go for much greater gains with the balance of the position.

To execute this trade you need to:

Sell a Third of your VALE June 17 Calls

As is always the case when we take partial profits, we hope this initial sale is a mistake, and the stock and our calls trade much higher in the days/weeks to come.

December 27, 2022
Average Up Existing Position: Buy the Second half of the Vale (VALE) June 17 Calls for $1.90 or less.

Vale (VALE) and its iron ore/copper/commodity mining peers continue to strengthen, as well as attract bullish option activity. Because of this, today I am going to buy the second half of my VALE position, making it a full position.

To execute this trade you need to:
Buy to Open the Second Half of VALE June 17 Calls

As noted in the original buy/trade alert, this group can get hot, and cold, very quickly … so there is risk. That being said, the strength in the sector, as well as bullish option activity and cheap price of the option, is too good to pass up, so I will be adding further exposure to this trade.

December 1, 2022
Half Position: Buy the Vale (VALE) June 17 Calls (exp. 6/16/2023) for $2 or less.

The market shot higher yesterday following a speech by Federal Reserve Chairman Jerome Powell that many traders viewed as “less hawkish.” Hopefully, maybe, possibly, the market is on the verge of an end-of-year run … or, conversely, this will be yet another failed bear market rally. Regardless …

Vale (VALE) popped to my radar in the last several days as option activity has turned very bullish, as the stock approaches recent highs. Here are some of those trades:

Today – Buyer of 7,000 Vale (VALE) June 18 Calls for $1.40 – Stock at 16.40

Yesterday – Buyer of 10,000 Vale (VALE) January 17 Calls for $0.85 – Stock at 16.3

Tuesday – Buyer of 15,000 Vale (VALE) June 18 Calls for $1.30 – Stock at 16.

And while I like the way VALE stock looks, as well as this option activity, there is little doubt that commodity-related stocks like VALE can get red hot, and then ice cold, in the blink of an eye. For that reason, plus the general market uncertainty, today let’s start with a half position.

To execute this trade you need to:
Buy to Open Half of a Position in the VALE June 17 Calls

The most you can lose on this trade is the premium paid, or $200 per call purchased.

The risks I see in this trade are:
General market risk
Commodity risk (VALE is a player in iron ore/copper/gold/silver)

Finally, should the option activity in VALE stay strong, I would anticipate adding the second half of our position … but let’s first see how investors handle the strong market move from yesterday, and the Jobs Report tomorrow morning.

Position (Original)
VALE June 17 Call
Position Strategy
Buy Call
Opened Date
December 1, 2022
Expiration
June 16, 2023
Net Price
1.81
Strike
17
Jacob Mintz is a professional options trader and editor of Cabot Options Trader. Using his proprietary options scans, Jacob creates and manages positions in equities based on unusual option activity and risk/reward.