As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price.
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Trade Alert - (GLD)- BUY
Buy the SPDR Gold Trust (GLD) April, 2016 $109-$112 in-the-money vertical bull call spread at $2.67 or best
Opening Trade
3-23-2016
expiration date: April 15, 2016
Portfolio weighting: 10%
Number of Contracts = 37 contracts
You can pay all the way up to $2.75 for this spread and it still makes sense.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of optionshouse.
It is a bet that the (GLD) will not trade below $112 at the April 15 options expiration versus the current $16.63.
If I am right, you will make a 12.35% profit on your investment in 18 trading days. It is a great low risk, high return way to approach this kind of frenetic algorithm driven market.
Gold is one of the very few investments that absolutely everyone wants to own this year.
Almost all economic scenarios going forward are gold positive.
This week?s sudden $62 pullback from the top in gold gives us a reasonable entry point in the new bull market.
If you can?t buy options, just pick up the (GLD) outright. Don?t touch the Market Vectors Gold Miners (GDX) on pain of death. It has run too far, too fast.
Worst case, gold will grind sidewayS from here as we digest the recent gains. The SPDR Gold Trust (GLD) March, 2016 $109-$112 in-the-money vertical bull call spread will still expire in four weeks at its maximum profit point.
Best case, gold breaks out to a new one year high on the next stock meltdown, which could be only days away. This would make (GLD) the perfect hedge for any long stock positions you may have.
Remember, the reasons we like the yellow metal now are that it is the biggest beneficiary of a NIRP (negative interest rate) world, production will fall 20% over the next four years, and China and India are ramping up their reserve buying.
If you are uncertain on how to execute an options spread, please watch my training video on ?How to Execute a Bull Call Spread? by clicking here at https://www.madhedgefundtrader.com/ltt-executetradealerts/. You must me logged into your account to view the video.
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous.
Don?t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.
Here are the specific trades you need to execute this position:
Buy 37 April, 2016 (GLD) $109 calls at????.?.??$7.90
Sell short 37 April, 2016 (GLD) $112 calls at.????..$5.23
Net Cost:???????????????????.....$2.67
Potential Profit: $3.00 - $2.67 = $0.33
(37 X 100 X $0.33) = $1,221 or 12.35% profit in 18 trading days
