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DrBubb's Trading Diary - MAR. 2012 - v.39

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Most GLD calls now, in some big numbers

Something like 2,000 oz.

Looks like the Turn could be in

 

Hi Bubb, Could you put my trading thread back in the Open Blogs section? I don't use it much, it will be easier to find over there. Cheers~

http://www.greenenergyinvestors.com/index.php?showtopic=9164&st=260

Done/

 

I was at Mining conference all week, and lucky to get the trades done

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GLD - I shall be watching this chart... update

 

glddaily.png

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The 188-Day Cycle Explained

188daycycle.jpg

Instead of a single March 22nd event, we saw:

+ Mexico----- R7.6 (20 March 2012)

+ Indonesia---- R6.2 (20 March 2012)

+ Papua N.G.- R6.6 (21 March 2012)

+ Oaxaca, Mex. R5.2 (22 March 2012)

+ S. Australia- R5.1 (23 March 2012)

/see: http://earthquake.usgs.gov/earthquakes/recenteqsww/Quakes/quakes_big.php

=====

/see post#172 :

http://www.greenenergyinvestors.com/index.php?showtopic=14951&st=160

== ==

 

Quake dates may also be associated with Gold price lows (?)

I am checking this...

 

GOLD Price LOWS - Price / Earthquake Date - Richter

+ 25 Feb. 2010/GLD-$106.60 : 27 Feb. 2010/R8.8 - Chile

+ 03 Sep. 2010/GLD-$121.15 : 04 Sep. 2010/R7.1 - Christchurch NZ

+ 15 Mar. 2011/GLD-$135.23 : 11 Mar. 2011/R9.0 - Japan

+ 26 Sep. 2011/GLD-$154.19 : 15 Sep. 2011/R7.3 - Fiji

+ 29 Dec. 2011/GLD-$148.27 : ??? (in between 188d.cycle)*

+ 22 Mar. 2012/GLD-$158.13 : 22 Mar. 2012/Estimate

========

*there was a R6.6 quake on 27 Dec.2011 - SW Siberia, Russia

 

glddaily.png

 

Looking further back , there's a better, but less-fixed cycle of about 6 months,

which GLD is only halfway through which may next bottom in mid-Jun'12:

 

gldcycle.png

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Also positioned heavily for a bounce in gold here. Nowhere near as big a position as you DrB - 1000 0z wow :)

Who do you trade your options with?

GB

I buy Bull Spreads on GLD, like this:

 

+Sep.$165 calls

- Sep.$175 calls

=====

I can make $10 (=$100 per ounce), risking $2.5 per ounce

 

So on each 100 GLD calls (1,000 oz), I risk $25,000 to make $100,000, potentially

 

I also have Jan.2013 positions, and GDX calls, and straight GLD calls

 

So for me large, buy maybe not so huge as a GiantBat, perhaps (?)

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IF YOU ARE A GOLD BULL...

You will want to see GDX trading over $50, with more than 20mn shares volume

 

GDX chart ... update

 

62797741.png

 

For GLD, the key Resistance Level is $162 / GLD-chart

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A new future for Queensland should help Laramide's stock price

 

 

Many embrace the change

 

 

It will certainly be easier to advance LAM's project in Queensland, since Anna Bligh always opposed it, despite there being many vocal supporters of the project

 

Will LAM's share price get fat on this news? Let's watch it

 

LAM.t / Laramide Resources ... update

 

lam.png

 

I am already long, having bought my most recent shares near $0.75 - Haha !

 

Uranium prices are still trying to complete an important bottom

 

Here's U.t / Uranium Participation certificate ... update

 

31093381.png

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More Rally is needed !

GLD chart ... update

 

glddaily.png

 

GLD needs to punch its way through resistance at/near GLD-$162/64 (Gold-$1670/1690)

and it needs to happen rather quickly !

Voila !

GBS.L is now at $162.32 / GBS.L-chart

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A nice move up in GLD yesterday !

 

GLD : $164.40 Change: +$2.8671 // Percent Change: +1.77%

Open: 163.17 / High: 164.54 / Low: 162.95 // Volume: 13,218,517

Others:

GDX : $50.63 Change: +$0.87 // Percent Change: +1.75%

GDXJ: $25.71 Change: +$1.06 // Percent Change: +4.30%

SLV : 31.935 Change: +0.695 // Percent Change: +2.22%

 

I hope some others caught the Low, since it was so very clearly signalled here!

 

To celebrate (?), The Two Gold threads have been combined:

I'd like to see the two gold's combined and the silver left to itself.

Okay.

Enough "yeas", and no "neas" - so it is done now !

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Here's why I trade Option spreads

 

I am buying a Bull Spread

My investment, for example is $12,000, as follows:

 

JUNE 2012 options: (with GLD at $160.13)

GLD-$165 calls: at $3.90 x 50 = $19,500 - Bought

GLD-$175 calls: at $1.50 x 50 = $07,500 + Sold

=====================

Bull Spread: +$165c - $175c == $12,000

 

If GLD is $175 or higher, is worth: $50,000

GLD-$175 = Gold price of about $1,800

Why do anything else?

Gold is up from below $160 to a $164.40 close.

 

JUNE 2012 options: (with GLD at $164.40)

GLD-$165 calls: at $5.70 x 50 = $28,500 - Bought

GLD-$175 calls: at $2.38 x 50 = $11,900 + Sold

=====================

Bull Spread: +$165c - $175c == $16,600

 

That's a return of 38.3% on a 2.66% move in GLD/ Gold.

 

Not bad for someone criticised sometimes for "not being bullish enough" on Gold.

 

Note that, if I had only bought the GLD-$165 calls:

 

My $3.90 x 50 = $19,500 Investment, went to $5.70 x 50 = $28,500 - that's 46.15%,

 

...while with the the GLD-$175 calls:

 

The $1.50 x 50 = $07,500 Investment, went to $2.38 x 50 = $11,900 - that's 58.67%,

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Here's why I trade Option spreads

 

 

Gold is up from below $160 to a $164.40 close.

 

JUNE 2012 options: (with GLD at $164.40)

GLD-$165 calls: at $5.70 x 50 = $28,500 - Bought

GLD-$175 calls: at $2.38 x 50 = $11,900 + Sold

=====================

Bull Spread: +$165c - $175c == $16,600

 

That's a return of 38.3% on a 2.66% move in GLD/ Gold.

 

Not bad for someone criticised sometimes for "not being bullish enough" on Gold.

 

Note that, if I had only bought the GLD-$165 calls:

 

My $3.90 x 50 = $19,500 Investment, went to $5.70 x 50 = $28,500 - that's 46.15%,

 

...while with the the GLD-$175 calls:

 

The $1.50 x 50 = $07,500 Investment, went to $2.38 x 50 = $11,900 - that's 58.67%,

 

I'm pleased for you.

 

Next time we meet you can buy me dinner ;)

 

Still think you should do a series of Info Products about puts calls spreads etc.

 

Let me know

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I'm pleased for you.

Next time we meet you can buy me dinner ;)

Still think you should do a series of Info Products about puts calls spreads etc.

Let me know

I am not posting to brag, but to help people here make some money.

 

This is free info. And it was signaled here in a timely way.

If people were listening, and understood, they could have done the same trade.

(Assuming, of course, they were looking for a window to go long gold.)

Then they can afford to buy their own dinner, and maybe even buy me a cup of coffee as thanks.

 

In fact, after the run up over 3 days, there has been a pullback.

If the low is now in place, we are seeing another entry opportunity.

I am add to my GLD calls, and even buy some physical gold today.

 

I reckon it is an attractive buying opportunity

 

78530197.png

 

What is going on in my trade is:

 

+ I am buying calls at one strike : GLD-$165, eqv. to Gold-$1700

and to partly "finance" :

+ I am selling higher strike calls: GLD-$175, eqv. to Gold-$1803

 

Both calls have an expiry of mid-June.

 

I cap my return at GLD$10, equivalent to Gold-$103

But the Call Spread costs only GLD-$2.50 (or about Gold-$26)

so I can make 4X my investment.

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There are GLD-related warrants trading in HK too,

but these are more complicated to unravel:

 

HK:2840 : $1,269 (/ 7.764 =eqv. $163.44 x 10.3= $1683)

(ratio: 1.327)

Code= : Strike x1.327 : Expiry. : Vol.-% : Price

16223 : 1288=$1709 : 10-07-12 : 27.4% : $0.660 / 0.580

14873 : 1400=$1858 : 17-04-12 : 24.6% : $0.014 / 0.140

16219 : 1410=$1871 : 24-09-12 : 25.0% : $0.405 / 0.405

 

/quotes:

 

======

More on

#16223:

Type Call 1m H/L 1.18/0.58

Maturity 10/07/2012 3m H/L 1.23/0.58

Implied Vol 27.4% Strike 1,288.00

Eff Gearing 9.456 Conversion Ratio 100.00

Premium 6.698% Transactions 2

Delta 49.2% HSI YTD 11%

Board Lot 1,000 HSCEI YTD 5%

 

#16219:

Type Call 1m H/L 0.83/0.34

Maturity 24/09/2012 3m H/L 1.21/0.34

Implied Vol 25.0% Strike 1,410.00

Eff Gearing 9.704 Conversion Ratio 100.00

Premium 14.303% Transactions 0

Delta 31.0% HSI YTD 11%

Board Lot 1,000 HSCEI YTD 5%

 

 

(The above is for my own use, but if someone wants to ask

a Question about them, I am open for that.)

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GOLD VERSUS CHINA STOCKS - An Inverse relationship?

 

Perhaps I have an over-active imagination, but I do not think so.

 

Gold appears to be moving in an inverse correlation to China stocks, and with GLD/Gold leading by perhaps a few weeks.

 

FXI/China Stocks versus GLD/ Gold ... update

 

62830150.gif

 

If this relationship continues, then the recent a slide in GLD could be predictive of a bounce in China stocks. But if gold reverses to the upside from the lower end of the channel, that would suggest weaker action ahead for China stocks. (I continue to think that GLD is on/near important support.)

 

I am seeking to explain why this is happening. Any ideas?

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SOMETHING BIG IS COMING

 

VIDEO- Something Great is coming ! Maybe tonight

 

I do think it is very possible - There are many rumors flying on the web.

Some are credible and some seem incredible.

 

 

Rumor: Ben Fulford and David Wilcock are talking about MASS ARRESTS of top bankers and politicians

 

Fact : Matt Taibi is writing thoughtful articles about how BoA (& some other big banks) are breaking the law

 

 

Rumor: The US Dollar is about to be devalued.

 

Here's a podcast about that /

MP3: http://www.spirit.kauwila.net/wordpress_kauilapele/120328_phoenix_show_2937253_dropping_the_dollar_piece.mp3

 

Fact : The BRIC countries and Arab countries are meeting within a few days

 

Rumor: Fulford etc., are talking about the launch of a "new currency" imminently.

 

Fact : Gold is down testing support and many dollar bulls are being quoted in press articles.

(Could this be the dollar's "last hurrah", or the prelude to an upside breakout?)

 

APRIL is shaping up to be a very interesting month - Buy some options !

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I am not posting to brag, but to help people here make some money.

 

This is free info. And it was signaled here in a timely way.

If people were listening, and understood, they could have done the same trade.

(Assuming, of course, they were looking for a window to go long gold.)

 

I was offering you an opportunity.

 

Like I say you should definitely do an info products set on these aspects of your trading.

 

Starting from base principles.

 

There are 1000s of people out there who if they understood how (potentially) easy it is to 'do' options etc, they'd jump at it.

 

However most info products about this sort of thing make it seem like rocket science.

 

What is going on in my trade is:

 

+ I am buying calls at one strike : GLD-$165, eqv. to Gold-$1700

and to partly "finance" :

+ I am selling higher strike calls: GLD-$175, eqv. to Gold-$1803

 

Both calls have an expiry of mid-June.

 

I cap my return at GLD$10, equivalent to Gold-$103

But the Call Spread costs only GLD-$2.50 (or about Gold-$26)

so I can make 4X my investment.

 

I understand the trade.

 

Do you think you could explain it clearly to a 12 year old?

 

If so you should definitely do an info product set and market it to a hot niche.

 

I appreciate the value of what you're showing.

 

Just that most folks put no value on what is available freely.

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SOMETHING BIG IS COMING

 

 

 

... Buy some options !

 

ummmm.... Ok.... What area and what sort?

 

I'm glad you are excited but I'm not picking which way things may go...

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I was offering you an opportunity.

. . .

I understand the trade.

 

Do you think you could explain it clearly to a 12 year old?

If so you should definitely do an info product set and market it to a hot niche.

I appreciate the value of what you're showing.

Just that most folks put no value on what is available freely.

Thanks, Mahon.

I appreciate it. Maybe we should take this conversation off-line.

It probably is easier to do these trades than most think, and IMHO,

it is a far easier (and safer) way to trade gold.

 

For example, when the Gold price dropped yesterday, I decided to add to my already large and growing Gold related position.

 

This time, I did something less fancy.

 

For my small account:

 

+ I bought 20x Apr.GLD.$164 calls paying $1.15 per contract, or a total of $2,300, or $2,324 with commission.

... then I saw the price fall further so:

 

+ I bought 20x Apr.GLD.$164 calls paying $1.11 per contract, or a total of $2,220, or $2,343 with commission.

 

... then I saw that Silver and Silver Wheaton (SLW) were down too, so:

 

+ I bought 15x Sept.SLV.$30 calls paying $4.45 per contract, or a total of $6,695.

 

I also bought GBG shares and did various other, more complicated trades in another account.

 

But these two GLD trades left me LONG 40X Apr.GLD.$164 calls at $4,567 or an average cost of $1.14.

 

How much Gold do I control?

4,000 GLD shares at Thursday's closing price are worth: $161.28 x4,000= $645,120

At a $1,661 Gold price, that's equivalent to 388.4 ounces

 

And it cost me only 0.70% of that.

 

The GLD.Apr.$164 calls closed at $1.35, so I was up $833 or 18.2% by the end of the day.

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ummmm.... Ok.... What area and what sort?

 

I'm glad you are excited but I'm not picking which way things may go...

I gave some examples above.

 

You could also buy Puts, Calls, or Straddles on stocks, or options on currencies.

 

The big changes, if they come, will impact many markets. Pick a trade you like, and do it with options, since with VIX at 15.48% options in many markets are very cheap right now.

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Ok thanks.

 

I only dip in and out of this forum and, in general terms, option trading is something that I've never dug into deeply

 

So when you said "Buy some options"... I was thinking "which way is he picking the market is going to go>.." (My assumption is down?)

But which part of the market?

And would gold go up in some scenarios? ==> If buying GLD long calls as I believe you have done above (if i have the terminology right)

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Attention: Bubb, other gold longs, I think we just got a green light in the PM sector today. Big bottoming hammer candle punctuating the end of a demoralizing slide.

 

All the guys I follow who I value their insights Clive Maund, Barbara, Hoye, Savage, plus other friends flashed alerts today. I think the risk/reward ratio just swapped ends today.

 

This looks bullish, at least for a while. I plunged today, 10,000 of NGD, and others across the board, big positions (for me at least) post-3356-0-97771400-1333075025_thumb.png

 

I though this thing was going lower, but it just looks like it fullfilled bottoming requirements both technically and psychologically.

 

post-3356-0-97771400-1333075025_thumb.png

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Thanks, Plunger.

 

Good post. And very timely too, I reckon.

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G's:

"So when you said "Buy some options"... I was thinking "which way is he picking the market is going to go>.." (My assumption is down?)

But which part of the market?"

= =

I gave some GLD call examples above.

You could also buy Puts, Calls, or Straddles on stocks, or options on currencies.

You might want to bet on the gap between GLD and SPY widening once again

 

37754369.gif

 

You can do that by purchasing Calls on GLD, and Buying puts on SPY.

 

That trade appeals to me. And even if they both move in the same direction, you will make money if the move is big enough.

 

If you look at the GLD-to-SPY Ratio itself:

 

65361510.png

 

...it looks like it may be setting up for the next move higher.

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