To The Moon

If gold continues its march toward $4,000, $Equinox Gold Corp.(EQX)$ could absolutely be a high-beta beneficiary especially given its leverage to production growth and reserve expansion.

In this article, I would like to discuss how these stacks up and how investors might trade it.

Gold Price Potential Upside Movement

If we looked at Gold, we can see that it might be going through consolidation and if we followed the previous pattern, we might see a potential breakout, so we might want to capture this opportunity to see how we can trade gold-related stocks.

EQX Upside Potential in a $4,000 Gold Scenario

Current Price: ~$10.97 USD, up ~2.14% recently

Analyst Targets: Price targets range from $6.87 to $15.23, with some bullish forecasts reaching up to $35, implying a potential 200–280% upside

Production Growth: EQX is ramping up Greenstone (330k oz/year) and targeting first pour at Valentine (180k oz/year) in Q3 2025

Reserve Leverage: Over 45 Moz in total gold endowment (reserves + resources)

Earnings Momentum: EPS forecast to grow from $0.43 in 2025 to $1.14 in 2026

If gold hits $4,000, EQX’s earnings and NAV could re-rate sharply, especially with its multi-asset footprint across Canada, Brazil, and the U.S.

Option Strategies for EQX Exposure

In this section I would like to share on some tailored strategies depending on our thesis and risk appetite:

Bull Call Spread

• Setup: Buy ATM call (e.g., $10), sell OTM call (e.g., $12.5)

• Why: Defined risk, lower premium outlay, captures upside if EQX trends toward breakout levels

Long Strangle

• Setup: Buy OTM call (e.g., $12.5) + OTM put (e.g., $7.5)

• Why: Volatility play—ideal if you expect a sharp move in either direction (e.g., earnings surprise or macro shock)

Buy-Write (Covered Call)

• Setup: Buy EQX shares + sell ATM or slightly OTM call

• Why: Generates income while holding the stock, especially useful if EQX consolidates before a breakout

Ratio Call Spread

• Setup: Sell 1 ATM call, buy 2 OTM calls (e.g., $12.5)

• Why: Low-cost way to play explosive upside while limiting downside exposure

Call Butterfly Spread

• Setup: Buy 1 ITM call, sell 2 ATM calls, buy 1 OTM call

• Why: Targets a specific price zone (e.g., $12.5) with minimal cost—great for tactical plays around earnings or gold price inflection

Tactical Considerations

• Implied Volatility: EQX options show elevated IV (some >80%), so premium-rich strategies like spreads or buy-writes are more efficient

• Earnings Catalyst: Next earnings due Nov 12, 2025—could be a volatility trigger

• Macro Overlay: If gold rallies due to stagflation, central bank buying, or geopolitical risk, EQX could outperform peers due to its growth pipeline

Technical Analysis - Exponential Moving Average (EMA)

If you looked at the recent upside movement for EQX with a strong RSI momentum, we can see that the bulls are in control and this might be a good time to look into catching the potential presented by the gold price inflection.

I would be considering to use option to play this upside which I will share in the next section.

Here Is How I Would Do A Bull Call Spread Setup

Here is a possible Bull Call Spread setup for Equinox Gold (EQX) with 17 October 2025 expiry. I’ll walk you through the trade idea, the rationale, and the risk/reward.

Current situation

• EQX is trading around US$10.97.

• Options for EQX have moderate implied volatility, and multiple strikes are available.

Trade idea: Bull Call Spread

A bull call spread involves:

• Buying a call with a lower (“long”) strike

• Selling another call with a higher (“short”) strike (same expiry)

This limits both the upside and the downside risk. This would be good if we are moderately bullish and think the stock will rise by Oct 17, but not skyrocket. This is what my thought for EQX are.

Possible setup

Here are a few possible strike combinations:

So I would buy the Oct 17 $12.50 call and sell the Oct 17 $15 call.

Hypothetical outcomes, risk/reward

• Net cost = Premium of $12.50 call − Premium received from $15 call

• Max possible profit = (Short strike − Long strike) − Net cost = ($15 − $12.50) − net cost

• Max loss = the net cost (what you pay up front).

• Breakeven point at expiry = Long strike + net cost.

For example, if you pay $0.20 for the $12.50 call and receive $0.10 for selling the $15 call, your net cost is $0.10:

• Breakeven ≈ $12.60

• Max profit = $2.50 − $0.10 = $2.40 per share (i.e. approx 150% return if it hits or exceeds $15)

• Max loss = $0.10 per share (about 11% of the current stock price)

Variations / tweaks

Depending on our risk tolerance / how strongly bullish you are, we could:

Move the long strike further “out of the money” (lower) to reduce cost, but then you need a bigger move upwards to profit.

Move the short strike higher (e.g. $15 or $16) to increase max profit, but lower the premium you receive, increasing cost.

Or use $10 or $9 strike as “long” for cheaper cost (but lower probability of finishing in-the-money).

Considerations / Risks

If the stock does not rise above your breakeven by expiry, we lose our net premium.

Time decay hurts us on the long call; selling the short call helps partially offset, but only if there is some time premium in that option.

Implied volatility changes can affect value (e.g. if IV drops, both calls lose value, but our long call likely loses more).

Liquidity / bid-ask spreads in those strikes — especially farther OTM strikes — may be wider, hurting execution.

Summary

Equinox Gold (EQX) remains an attractive potential buy as the company continues to expand production capacity, lower all-in sustaining costs, and benefit from supportive gold prices. With improving balance sheet strength and multiple development projects nearing completion, EQX is positioned to deliver higher free cash flow over the next few years. The stock has shown recent upside momentum, reflecting renewed investor confidence in both the company’s growth prospects and the broader gold sector as a hedge against macro uncertainty.

For investors seeking a defined-risk strategy, a bull call spread offers a practical way to participate in this momentum.

By buying a lower-strike call and selling a higher-strike call with the same expiration, the trade reduces upfront cost compared to a naked call while still capturing gains if EQX continues its upward trajectory.

The capped upside is offset by lower entry risk, making it a balanced approach for those who are moderately bullish but want to control downside exposure. This strategy aligns well with EQX’s potential for steady, not explosive, appreciation.

Appreciate if you could share your thoughts in the comment section whether you think EQX bull call spread present a good opportunity for us to take advantage of a potential upside move for EQX.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.