Hello Investors,
Our GLD position we entered into on Tuesday started out of the gate working perfectly. However, it has since reversed back up in price. As we detailed on Tuesday, if the price action turns choppy then we will want to exit this position quickly. If GLD had continued to fall sharply lower in price, then this type of position would have had a large reward. We gave it a chance but the bigger sized breakdown didn’t materialize. We exited the entire position today for 0.02 debit.
Bought to close: GLD Nov 20th (monthly) 182.00 strike puts (ratio of 1)
Sold to close: GLD Nov 20th (monthly) 176.00 strike puts (ratio of 2)
Debit of 0.02 paid
In addition, we have a trade that once again has worked perfectly in QQQ. We will let the short calls expire for a full profit of the credit received. We are don’t a little bit different style of trade for next week. We are going to buy a 1×2 call spread in QQQ. It still has the same short (naked) call aspect as the trade we have done the last couple of weeks. However, it gives us even more padding and a bigger pay day if the market moves higher. The details are as follows:
Buy to open: QQQ Oct 16th (monthly) 288.00 strike calls (ratio of 1)
Sell to open: QQQ Oct 16th (monthly) 290.00 strike calls (ratio of 2)
Net credit: 0.69
This still has the “naked” call aspect to the trade. So, we will need to monitor closely for adjustments/exits next week as needed.
This is basically a broken wing butterfly. If the stock stays below 288/share through next week then we make a +0.69 credit or +69.00. If the stock moves up above 288/share and all the way to 292.69 (our breakeven price) then we would make even more money. A couple hundred bucks being the best case scenario. Above 292.69/share is when our risk really kick-in and we have unlimited risk potential.
Have a great weekend!