• support@madhedgefundtrader.com
  • Member Login
Mad Hedge Fund Trader
  • Home
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu

Trade Alert - (GILD) December 27, 2013

Trade Alert

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 - (GILD)

Buy the Gilead Sciences (GILD) $67.50 - $70 bull call spread at $2.15 or best

Opening Trade

12-27-2013

expiration date: 1-17-2014

Portfolio weighting: 10%

Number of Contracts = 47 contracts.

Obamacare is proving to by one of the greatest windfalls in the history of the health care industry. As of January 1, more than 30 million individuals will enjoy government guaranteed payments for health care services. In addition, millions more are signing up for private insurance for the first time.

One of the cleanest shots at this new profit stream is Gilead Sciences (GILD). The ticker symbol seems so appropriate for this new Golden Age for the health care industry.

(GILD) is an American biotechnology company that discovers, develops and commercializes treatments for a range of different diseases. The California based firm initially concentrated on antiviral drugs to treat patients infected with HIV, hepatitis B, or influenza.

In 2006, Gilead acquired two companies that were developing drugs to treat patients with pulmonary diseases. These are all expected to be huge growth areas in the future, and the company has become a favorite of hedge fund traders. This is not a new trade, as both the shares and the sector have been on fire all year.

If you want a lower risk, more diversified play in the area, you can buy the Health Care Select Sector SPDR (XLV). Please note that a basket of stocks is going to deliver half the volatility of single stocks. Therefore, we have to be more aggressive with the positioning to make any money, picking strikes that are closer to the money.

Johnson and Johnson (JJ) is the largest holding in the (XLV), with a 12.8% weighting, while Gilead Sciences (GILD) is the fourth, with a 5.1% share. For a list of the largest components of this ETF, please click here at
https://www.spdrs.com/product/fund.seam?ticker=XLV

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. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous. Don?t execute the legs individually or you will end up losing much of your profit.
Keep in mind that these are ballpark prices only. Spread pricing can be very volatile on expiration months further out.

Here are the specific trades you need to execute this position:

Buy 47 January, 2014 (GILD) $67.50 calls at????.$7.70
Sell short 47 January, 2014 (GILD) $70 calls a??..?$5.55

Net Cost:????????????....??.......?.......$2.15

Profit: $2.50 - $2.15 = $0.35

($0.35 X 100 X 47) = $1,645 ? 1.65% for the notional $100,000 model portfolio.

12.27.2013 GILD 1
12.27.2013 GILD 2
12.27.2013 GILD 3

Share this entry
  • Share on Facebook
  • Share on X
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share by Mail
https://www.madhedgefundtrader.com/wp-content/uploads/2011/10/slider-05-trader-alert.jpg 316 600 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-12-27 10:51:362013-12-27 10:51:36Trade Alert - (GILD) December 27, 2013

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Mad Hedge Fund Trader (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. 

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

Copyright © 2025. Mad Hedge Fund Trader. All Rights Reserved. support@madhedgefundtrader.com
  • Privacy Policy
  • Disclaimer
  • FAQ
Link to: December 27, 2013 - MDT - SSO Trade Alert! Link to: December 27, 2013 - MDT - SSO Trade Alert! December 27, 2013 - MDT - SSO Trade Alert! Link to: Trade Alert - (TLT) December 27, 2013 Link to: Trade Alert - (TLT) December 27, 2013 Trade Alert - (TLT) December 27, 2013
Scroll to top