Very recently, War Room members took advantage of a dip in gold prices by adding to our recommended position in microcap gold stock Americas Gold and Silver (NYSE: USAS).
Microcap stocks trade differently from small cap, midcap or large cap stocks. These stocks are not followed as broadly, usually have smaller floats (tradable shares) and tend to make outsized moves.
Microcaps are usually very speculative stocks that act as great trading vehicles. Americas Gold and Silver is a little different…
First, it’s a company that produces gold and silver.
Second, it’s well-capitalized thanks to outside partnerships and has an investor following that provides it with good liquidity. Liquidity is very important, as it reflects the ease with which we can get in and out of a trade.
On September 27, I wrote this to War Room members about Americas Gold and Silver:
This is a microcap gold stock. It has a tight float. That is one reason why you MUST use limit orders for this play. It will go up and down with the price of gold, but it will likely outperform on the upside and get hammered harder on the downside. But trying to predict a bottom in the stock is not a worthwhile endeavor, as there are major players involved in the stock (Eric Sprott has invested more than $30 million in the company in the past three months – if you don’t know who he is, please do a Google search). We are now buying it at prices less than he paid. I am good with that. It will have several catalysts in the coming months as well from new operations coming online. This is a very SPECULATIVE play, so position size accordingly. BUY Americas Gold and Silver (NYSE: USAS) for $2.70 or lower, GOOD FOR THE DAY.
Last week, members took profits on the position as the shares jumped up to $3.30.
The best part about the Americas Gold and Silver trade was that everyone was able to get in and out at our recommended price – a testament to the liquidity in the situation.
Action Plan: Americas Gold and Silver also established a nice trading channel that we will exploit for future trades in the shares.
In The War Room, we look for opportunities wherever we can find them, from options and stocks to exchange-traded funds – you name it. Join me in The War Room now so you don’t miss the next trade!
[adzerk-get-ad zone="245143" size="4"]About Karim Rahemtulla
Karim began his trading career early… very early. While attending boarding school in England, he recognized the value of the homemade snacks his mom sent him every semester and sold them for a profit to his fellow classmates, who were trying to avoid the horrendous British food they were served.
He then graduated to stocks and options, becoming one of the youngest chief financial officers of a brokerage and trading firm that cleared through Bear Stearns in the late 1980s. There, he learned trading skills from veterans of the business. They had already made their mistakes, and he recognized the value of the strategies they were using late in their careers.
As co-founder and chief options strategist for the groundbreaking publication Wall Street Daily, Karim turned to long-term equity anticipation securities (LEAPS) and put-selling strategies to help members capture gains. After that, he honed his strategies for readers of Automatic Trading Millionaire, where he didn’t record a single realized loss on 37 recommendations over an 18-month period.
While even he admits that record is not the norm, it showcases the effectiveness of a sound trading strategy.
His focus is on “smart” trading. Using volatility and proprietary probability modeling as his guideposts, he makes investments where risk and reward are defined ahead of time.
Today, Karim is all about lowering risk while enhancing returns using strategies such as LEAPS trading, spread trading, put selling and, of course, small cap investing. His background as the head of The Supper Club gives him unique insight into low-market-cap companies, and he brings that experience into the daily chats of The War Room.
Karim has more than 30 years of experience in options trading and international markets, and he is the author of the bestselling book Where in the World Should I Invest?
