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. This is your chance to ?look over? John Thomas? shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen.
Trade Alert - (GLD)- BUY
Buy the SPDR Gold Shares Fund (GLD) November, 2016 $112-$115 in-the-money vertical bull call spread at $2.62 or best
Opening Trade
10-11-2016
Expiration Date: November 18, 2016
Portfolio Weighting: 10%
Number of Contracts = 38 contracts
Let me tell you what is happening with the price of gold.
The barbarous relic snapped out of a five year bear market in January, delivering a very smart 31.68% rally during the first half of 2016.
The big driver was the sudden collapse of European and Japanese interest rates to hugely negative levels, some to -0.40%.
That gave gold a real positive return, some 40 basis points, compared to European and Japanese cash returns.
By July, gold reached a multiyear high at $1,350, and speculative longs in the futures market rocketed to all time highs.
There it levitated for three months, and the price for the yellow metal moved sideways.
Then, the Bank of Japan peed on the parade, allowing overnight rates to float back up to 0.10% by failing to expand quantitative easing, its hyper aggressive monetary program.
The European Central Bank following suit. A flash fire ensued in the movie theater, French-frying many trading longs in gold, and triggering massive stop loss orders to sell.
That took us down a gut churning 11.6% in short order. Speculative longs are now a shadow of their former selves.
Therefore, it is safe to stick you toe back in the water on the gold trade.
I believe we are only in the first year of a new 20-year bull market in gold. China has to buy 10,000 metric tonnes of the sparkly stuff worth $471 billion over the next 40 years to reach the same level with Western central banks.
That works out to 250 tonnes a year. Recently, it has only been buying 250 tonnes a year on the open market. In other words, it is falling behind.
To read more luscious detail on the long term fundamentals for gold ownership, click Why China is Gold?s Best Friend.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of optionshouse.
If you are uncertain about how to execute an options spread, please watch my training video How to Execute a Vertical Bull Call Spread.
Keep in mind these are ballpark prices at best. After the text alerts go out, prices can be all over the map. There is no telling how much the market will have moved by the time you get this email.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage.? In today's market, investors need every advantage they can get.
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 across platforms.
Here are the specific trades you need to execute this position:
Buy 38 November, 2016 (GLD) $112 calls at????.?.??$8.25
Sell short 38 November, 2016 (GLD) $115 calls at.???.?..$5.63
Net Cost:????????????????????......$2.62
Potential Profit: $3.00 - $2.62 = $0.38
(38 X 100 X $0.38) = $1,444, or 14.50% profit in 28 trading days.
