needmorespace Posted June 21, 2007 Report Share Posted June 21, 2007 Well I just bought some GDX September 37 puts (edit: calls) for 3.30. Am I crazy? Too early? Comments welcome... Link to comment Share on other sites More sharing options...
drbubb Posted June 21, 2007 Report Share Posted June 21, 2007 I'm on the same page. I bought the July $34 calls, paying $4.01 last wednesday. Not much time, I know, but my breakeven is a decent: $38.01. GDX is now at $38.75 (so at these levels, I am at least $0.74 to the good) Why choose that option? (Nothing wrong, it is in-the-money), I am just curious Link to comment Share on other sites More sharing options...
needmorespace Posted June 22, 2007 Author Report Share Posted June 22, 2007 Why choose that option?(Nothing wrong, it is in-the-money), I am just curious Why that particular option? The truth is that I used some pretty crude and doubtless incomplete analysis to choose that option and I'm not at all sure that I got the right one. I'm trying to get better at this which is why I come to GEI and why I opened up a thread on it. How did I choose? The rambling thought process goes something like this: for starters I assume that there will be a near-term upward move in GDX. So I look at the near months, July and August and I get scared because what if the "summer move up" doesn't come until very late in the day? September it is, even though I'll be paying more for time-value. And then I start looking at the costs of different strikes and, yes, I know that my risk is lower the deeper in the money I buy but I'm looking for a strong up-side so I look at strikes that are only slightly in the money, doing some basic calculations on where I am getting the lowest profit point. 37 seemed to be the one for me. Part of what leads me down this unscientific and faulty process is that I don't make these trades very often and so, psychologically, I'm looking for the big win rather than a high probability of any upside at all. I can see, intellectually, that a better way to go might be with more frequent lower risk, lower return. I'd be very interested in others' views on option selection, risk, reward and the role of pyschology, predispositions etc. Link to comment Share on other sites More sharing options...
Bubble Pricker Posted June 22, 2007 Report Share Posted June 22, 2007 I'm on the same page.I bought the July $34, paying $4.01 last wednesday. I don't understand. Weren't you gold stocks bullish until recently? The Slingshot? Link to comment Share on other sites More sharing options...
Bubble Pricker Posted June 22, 2007 Report Share Posted June 22, 2007 Well I just bought some GDX September 37 puts for 3.30. for starters I assume that there will be a near-term upward move in GDX. Are you sure you got this right? Link to comment Share on other sites More sharing options...
needmorespace Posted June 22, 2007 Author Report Share Posted June 22, 2007 Are you sure you got this right? Nope. I did buy calls. Must have been distracted when writing this post... Link to comment Share on other sites More sharing options...
drbubb Posted June 22, 2007 Report Share Posted June 22, 2007 I don't understand. Weren't you gold stocks bullish until recently? The Slingshot? Whoops. I misread that. I bought calls, not puts- so opposite side of the page, unless he actually meant calls, which he did- based on the price- which is why i misread it Link to comment Share on other sites More sharing options...
needmorespace Posted June 22, 2007 Author Report Share Posted June 22, 2007 Yes, I bought calls! I just had a brain fart when typing my post here... I see that no options of the kind I bought were traded today although I am in profit based on the spread and in spite of GDX losing almost a full percentage point today. Link to comment Share on other sites More sharing options...
needmorespace Posted June 26, 2007 Author Report Share Posted June 26, 2007 Stopped out of my GDX calls for a small loss but some XLF puts I have are doing very well. Looks like the gold slingshot is going to have to wait a while... Link to comment Share on other sites More sharing options...
needmorespace Posted July 2, 2007 Author Report Share Posted July 2, 2007 GDX is up 2.5% today on fairly ordinary volume. I wonder what some of you technicians think is on the cards for the near future? After I got stopped out a few days ago I actually reloaded with some more September 37 calls at 2.45 and they're now showing a spread of 3.30/3.50 although not a single one changed hands today (note to self - might be better to go with a bit less eccentric and more liquid options). Link to comment Share on other sites More sharing options...
drbubb Posted July 9, 2007 Report Share Posted July 9, 2007 Sold half of my GDX calls at $7.00 Those are July $34.calls, at effective price of GDX-$41 Link to comment Share on other sites More sharing options...
nbarter Posted July 9, 2007 Report Share Posted July 9, 2007 Sold half of my GDX calls at $7.00 Those are July $34.calls, at effective price of GDX-$41 Getting cold feet on your bullish outlook? I am ideally looking for one more push higher in the euro against the dollar to a new all time high and then a sizeable dollar strengthening for a period which might help bring gold down. Link to comment Share on other sites More sharing options...
needmorespace Posted July 9, 2007 Author Report Share Posted July 9, 2007 Sold half of my GDX calls at $7.00 Those are July $34.calls, at effective price of GDX-$41 Yep, I sold a good portion of my September 35 calls for about $5 (close to a double) at GDX $41.20. I was watching GDX and it just seemed to be running out of steam but it was a decent run nonetheless. Now it's time to start planning the next entrance (I'm still thinking of Puplava's recent comments about HUI etc being a "coiled spring") but I think I'll watch the price action for a little while before making a move. Link to comment Share on other sites More sharing options...
Bubble Pricker Posted July 9, 2007 Report Share Posted July 9, 2007 Getting cold feet on your bullish outlook? Yes, I am a little perplexed by that too, given that gold is barely higher now than when you first mentioned the "slingshot". And in another thread, cycles are cited to indicate a bottom in gold, but if this really was a cycle bottom, then we would expect more upside wouldn't we? Anyway, just idle musings. Nothing wrong with taking profits. Link to comment Share on other sites More sharing options...
drbubb Posted July 9, 2007 Report Share Posted July 9, 2007 Getting cold feet on your bullish outlook? I am ideally looking for one more push higher in the euro against the dollar to a new all time high and then a sizeable dollar strengthening for a period which might help bring gold down. Not at all. Buying at $4, and selling at $7, is a nice fat profit- makes me "bullet-proof" on the half that I kept. There was a gap up, so I decided to pull some cash out, and recycle it into some other options. I'm looking at puts on XBD, SPX, etc. And calls on the Yen-FXY. Will put in some orders after dinner, i suppose Link to comment Share on other sites More sharing options...
Bubble Pricker Posted July 9, 2007 Report Share Posted July 9, 2007 I'm looking at puts on SPX, etc Save your money and have a nice dinner instead. The stock market ain't going down. Link to comment Share on other sites More sharing options...
drbubb Posted July 9, 2007 Report Share Posted July 9, 2007 Save your money and have a nice dinner instead. The stock market ain't going down. We shall see. I did buy a few puts before the close today. On: SPY (etf for the SPX) and FXI (etf for China shares) I missed getting the XBD puts, unfortunately. Link to comment Share on other sites More sharing options...
drbubb Posted July 10, 2007 Report Share Posted July 10, 2007 Save your money and have a nice dinner instead. The stock market ain't going down. The market seemed to have other ideas. Sold half the SPX puts at $4.50, which I bought yesterday at $3.50 Looking to re-enter GDX calls : Aug.$35 or Aug.$36, where my breakeven (X plus Option cost) would be $41. This rolls the position forward one month Link to comment Share on other sites More sharing options...
Bubble Pricker Posted July 10, 2007 Report Share Posted July 10, 2007 The market seemed to have other ideas.Sold half the SPX puts at $4.50, which I bought yesterday at $3.50 Well, if you are playing one-day scalps then yes, this time you win. Given the spreads in options, I doubt one can consistently make money with short term trades like that. You would have to have a very good win/loss ratio. Anyway, gold on a nice roll today. The $ got hammered. Yen rose over 1.5 cents in a matter of minutes. $ fall stopped right now at about 122 Yen. Link to comment Share on other sites More sharing options...
drbubb Posted July 11, 2007 Report Share Posted July 11, 2007 Given the spreads in options. where are you trading options? The spreads are minimal where I trade (on the us markets) I can trade like that when I am in London, but i would have stayed in the trade longer, if prices had taken longer to fall. Fior example, I am still in FTSE put trades from last week, but will priobably exit with a nice profit today. I may re-establish the put trades after a bounce actually, i re-established my GDX position Having sold half of my July.34 calls at $7.00, I used today's dip in the GDX to buy a similar number of Aug.36 calls at $5.00. In effect, this was a no-cost roll from July into August, with me taking some cash off the table. I still have another 20 July options to roll Link to comment Share on other sites More sharing options...
drbubb Posted July 19, 2007 Report Share Posted July 19, 2007 How is this trade working out for you, NeedMoreSpace? Link to comment Share on other sites More sharing options...
deeper Posted July 19, 2007 Report Share Posted July 19, 2007 where are you trading options? The spreads are minimal where I trade (on the us markets)I can trade like that when I am in London, but i would have stayed in the trade longer, if prices had taken longer to fall. Fior example, I am still in FTSE put trades from last week, but will priobably exit with a nice profit today. I may re-establish the put trades after a bounce actually, i re-established my GDX position Having sold half of my July.34 calls at $7.00, I used today's dip in the GDX to buy a similar number of Aug.36 calls at $5.00. In effect, this was a no-cost roll from July into August, with me taking some cash off the table. I still have another 20 July options to roll Dr Budd, are you looking at any calls right now? It looks like the gold stocks have really taken off, and I don't see value here... Link to comment Share on other sites More sharing options...
needmorespace Posted July 20, 2007 Author Report Share Posted July 20, 2007 How is this trade working out for you, NeedMoreSpace? I got out of the trade a few days ago with close on 100% profit. As usual I wish I'd risked a bit more capital, especially since I'm very cash heavy right now. But all in all, I'm delighted. Learning about leveraged trading using options from this forum has been a real benefit to me and I'm grateful to you and for all the positive contributions that people are making on GEI. Next in my personal plan for growing my knowledge, experience and confidence is to develop a stronger foundation of technical analysis, though. I agree with your point that the really good opportunities come only a few times a year and I have to admit that, alone, I might not have had the confidence to make this trade - it was reading opinions on GEI that tipped me into going ahead. I was also interested to read on another thread about your low options trading commissions with Fidelity. I'm currently paying E*Trade $19.99 plus $1.75 per contract so I'm going to look at switching brokers. Link to comment Share on other sites More sharing options...
drbubb Posted July 21, 2007 Report Share Posted July 21, 2007 Dr Bubb, are you looking at any calls right now? It looks like the gold stocks have really taken off, and I don't see value here... I agree. I bought some calls on Novagold last week, and it dipped again Friday. I might add next week. Suggestion: go out to at least Dec., given some news expected by mid-November Link to comment Share on other sites More sharing options...
drbubb Posted July 21, 2007 Report Share Posted July 21, 2007 I got out of the trade a few days ago with close on 100% profit. That's great to see. The risk is higher now (since gold has moved off the lows. But there may still be some room in this move. Dont chase the stocks in buying Calls, await those low volume dips, which come AFTER moves up on strong volume = = = I will be putting some ideas up, in the new "Members Only" section (about to be created) Link to comment Share on other sites More sharing options...
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