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) – TAKE PROFITS
SELL the SPDR Gold Shares (GLD) November 2024 $230-$235 vertical BULL CALL debit spread at $4.95 or best
Closing Trade
10-30-2024
expiration date: November 15, 2024
Portfolio weighting: 10%
Number of Contracts = 25 contracts
My bet that gold would continue to appreciate going into the US presidential election has paid off big time.
In a mere 11 trading days, (GLD) has exploded by $12.61, or 5.14% to a new all-time high. Everything went right with this trade. With 91.67% of the maximum potential profit in hand, the risk reward of continuing is no longer favorable.
I also get to duck the election risk by coming out now. I Trump win would send the bond market crashing, interest rates soaring, and prompt a major correction in the barbarous relic.
If you can’t do options, buy the stock. My long-term target for (GLD) is $300, up from today’s $257, sometime in 2025.
Therefore, I am selling the SPDR Gold Shares (GLD) November 2024 $230-$235 vertical BULL CALL debit spread at $4.95 or best.
As a result, you get to take home $1,375 or 12.50% in 11 trading days. Well done, and on to the next trade.
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 are not sitting in front of a screen all day in the US, simply enter a spread of Good-Until-Cancelled orders overnight, like $4.95, $4.92, $4.90 and $4.88. You should get done on some or all of these.
A Fed interest rate cut of 25 basis points is now a certainty on November 6 and all falling interest rate plays in the stock market are in play. Rising rate plays and flat technology could be the trade for the rest of 2024.
It is all very gold positive.
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 $235 by the November 15 option expiration in 12 trading days.
Here are the specific trades you need to execute this position:
Sell 25 November 2024 (GLD) $230 calls at………….…….............…$28.00
Buy to cover short 25 November 2024 (GLD) $235 calls at…………$23.05
Net Proceeds:…………………….…….………..…………....................….....$4.95
Profit: $4.95 - $4.40 = $0.55
(25 X 100 X $0.55) = $1,375 or 12.50% in 11 trading days.
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.
