Trade Alert – (GLD) September 5, 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) – Sell to Take Profits

Sell the (GLD) September, 2012 $150-$154 Call Spread at $3.95 or best

Closing Trade


expiration date: 9-21-2012

Portfolio weighting: 10%

($10,000/100/$3.95) = 30 Contracts

These are the trades you should execute to come out:

Sell the September, 2012 (GLD) $150 calls at………$14.05
Buy the September, 2012 (GLD) $154 calls at….….$10.10

Net Proceeds:……………………………….…….………...$3.95

Profit: $3.95 - $3.45 = $0.50 (+14.5%)

(30 X 100 X $0.50) = $1,500, or 1.50% profit for the notional $100,000 portfolio.

This has been a total home run of a trade. The gold upside breakout played out exactly as I expected, hitting my $1,700 target. We have taken 91% of the potential profit out of this position so it is time to say “Thank you Mr. Market” and take your leave. The risk/reward is no longer favorable. By taking profits on this one position I am reducing my total weighting in gold down from 30% to 20%. If you don’t want to pay the execution costs, or are just plain lazy, you can always just run this into expiration in 12 trading days when it will most likely just drop off of your position sheet.

I still like gold longer term, at least into the year end. So I intend to add again on the next $50 dip, if that ever occurs. The fundamental bull case is stronger than ever, now that we have put a medium term bottom on the charts.

It is a pleasure to report that this is the 16th consecutive closing position for the Trade Alert Service.

Thank you Mr. Goldfinger!