Trade Alert - (GLD) April 7, 2025 - STOP LOSS - SELL

When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.

 

Trade Alert - (GLD) – STOP LOSS

SELL the SPDR Gold Shares (GLD) April 2025 $270-$273 vertical BULL CALL debit spread at $2.10 or best

 

Closing Trade

4-7-2025

expiration date: April 17, 2025

Portfolio weighting: 10%

Number of Contracts = 40 contracts

Interest rates are soaring, up some 25 basis points for the ten-year US Treasury bond overnight. This is because of panic selling of all asset classes, regardless of fundamentals. Traders are selling everything they have to meet margin calls.

With $11 trillion in stock market capitalization lost in a month, cash is king. Risk control is paramount. The only “RISK OFF” asset is cash or 90-day US Treasury bills.

Therefore, I am selling the SPDR Gold Shares (GLD) April 2025 $270-$273 vertical BULL CALL debit spread at $2.10 or best.

DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.

If you live in a foreign time zone when the US stock market is closed, such as Australia, or don’t want to spend all day in front of a screen, simply enter a spread of Good-Until-Cancelled orders overnight, like $2.10, $2.05, and $2.00. You should get done on some or all of these.

The bull case for gold is simple. Falling interest rates mean less yield competition for gold, which yields nothing. China and Russia have been stockpiling gold for years to avoid international financial sanctions. The only way the Chinese can save right now is to buy gold.

A global gold shortage is developing with new mine costs rising. Gold also offers protection against rising US debt, which is expected to hit $35 trillion shortly.

On top of all this, Chinese speculators have shifted their principal savings vehicle from real estate, which has crashed and has no future, to gold. This adds a large retail element that has never existed before.

SPDR Gold Shares (GLD) is a play on physical gold. They are shares in a corporation that owns 400-ounce gold bullion bars held by a London trust. It is far safer owning gold through the (GLD) than owning your own physical gold bars via a third-party custodian. If the custodian goes under, which is frequent, your gold is gone. With (GLD, your credit risk is with State Street, a highly rated firm with a strong balance sheet.

For details about SPDR Gold Shares (GLD), please visit their website at https://www.spdrgoldshares.com.

This was a bet that the (GLD) would not fall below $273 by the April 17 option expiration in 10 trading days.

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

Sell 40 April 2025 (GLD) $270 calls at………….…….............…$7.00

Buy to cover short 40 April 2025 (GLD) $273 calls at…………$4.90

Net Proceeds:………………………….………..………….…................$2.10

Loss: $2.60 - $2.10 = $0.50

(40 X 100 X $0.50) = $2,000.

 

 

 

If you are uncertain about how to execute a bear put options spread, please watch my training video by clicking here.

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. Spread pricing can be very volatile on expiration months farther out.

Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.