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Tuesday, June 28, 2016

Gold (GLD) Call Options

Friday, 6/24/2016 (12:58:23 pm, PT)

sold -10 June 30, 2016  $129 calls at $0.91

Why did I place this trade?
  • "BREXIT" results were announced in the middle of the night and gold jumped 5%
  • when GLD rises, its implied volatility also rises which results in very attractive call premiums
  • 73% probability of success
  • stochastics in overbought region

Tuesday, 6/28/2016 (10:53:58 am, PT)

bought back all 10 calls at $0.19

Why did I place this trade?
  • GLD dropped today (6/28)
  • when GLD drops, its implied volatility also drops which results in cheaper call premiums
  • TAKE PROFITS

Comments:

It's VERY tempting to hold my position for TWO more days in order to keep the max credit of $910, but it's good practice to always TAKE YOUR PROFITS

PROFIT:  $720 (in 3 trading days)

SUCCESS!