Trade Alert – (GLD) December 19, 2012

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.

Trade Alert – (GLD)

Stop Loss

Sell the SPDR Gold Trust Shares (GLD) January, 2013 $157-$162 Call Spread at $3.41 or best

Closing Trade

12-19-2012

expiration date: 1-18-2013

Portfolio weighting: 10%

($10,000/100/$4.25) = 24 Contracts

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. This alert is for the monthly options. Don’t buy the weeklies by accident. The difference between the bid and the offer on these spread trades can be enormous. Don’t buy the legs individually or you will end up losing much of your profit up front.

Keep in mind that these are ballpark prices only. Spread pricing can be very volatile on expiration months farther out.

These are the trades you should execute:

Sell 24 January, 2013 (GLD) $157 calls at……………………$5.45
Buy to cover short 24 January, 2013 (GLD) $162 calls at…..$2.04
Net Proceeds:…………………………………….…….……….$3.41

Loss: $4.25 – $3.41 = $0.84

(24 X 100 X $0.84) = $2,016, or 2.02% profit for the notional $100,000 portfolio for a three month position.