Trade Alert: Top Names + Gold

A gold miner that should benefit from the next China stimulus.

Hong Kong Crashes

Stocks in Hong Kong crashed overnight, with Chinese ADRs following suit today. The proximate cause was a meeting by China’s National Development and Reform Commission, which yielded no additional stimulus announcements. Nevertheless, ZeroHedge expects China will ultimately unleash an even bigger stimulus than its last one:

And since for Xi the time for half-measures is now over, especially if he wants to avoid a deflationary spiral, social insurrection and political mutiny, this only leaves one option open: the truly nuclear one. The only question is when, because while the market may have peaked at +30% the first time China tried to goose markets, the next time we are talking triple digits, not to mention $3K gold and $100K+ bitcoin.

We have long positions in Chinese names that should benefit from that nuclear stimulus, including the ones we added yesterday (not the best timing on those, in hindsight)…

And we have exposure to Bitcoin via our options on Bit Digital (BTBT 0.00%↑), whose CEO we interviewed last week.

Longtime subscribers may have exposure to gold via Orla Mining (ORLA 0.24%↑), which we own at a cost basis of $2.90 per share. But since a gold miner appeared in our top ten names on Monday, why not add some additional gold exposure with an options trade on it today?

Details below.

Today’s Bullish Gold Trade