Exit Stop: -2 GLD 100 JUL 09 91 CALL .45

GLD broke below \$90.50 today and touched \$89.09. It's now rebounded to \$89.35 around noon. I've set a stop for my long call options at the low of the day. Having regretably sold my long puts last week, this supposedly strangle options strategy is now cooked.

I still believe my entry was good. But I screwed myself on the exit. When the price reached a near resistance last week, I should have set a loose stop on the calls and not the puts. Just to account for the case if we're back into a trading range.

Update: I sold my calls at 12:20 for 0.50.

[caption id="attachment_1562" align="aligncenter" width="500" caption="SPDR Gold ETF"][SPDR Gold ETF][][/caption]

[caption id="attachment_1563" align="aligncenter" width="500" caption="SPDR Gold ETF"][SPDR Gold ETF][][/caption]

[SPDR Gold ETF]: http://traderpau.files.wordpress.com/2009/07/2009-07-08-gld.png [SPDR Gold ETF]: http://traderpau.files.wordpress.com/2009/07/2009-07-08-gld_prop.png

Posted 08 July 2009 in stocks.

SOLD -2 GLD 100 JUL 09 90 PUT @.65

I just sold the short side of my options strangle for July GLD. As can be seen from Figure 1, today is the second time we're testing the \$91 support without success. GLD has been very volatile (like everything else) lately, so there could still be some room down. Perhaps to \$90.50? But seeing that we're entering the July 4th long weekend, the options premium is taking a hit. So I'm exiting my weaker side of this position on a retracement.

The intermediate term bullishness in GLD is obvious to me, see Figure 2. Notice the rising support and the wedge forming. In the short term, like today's action, we touched \$91 a second time after the upward jump from \$90 to \$93 last week. Then we bounced back pretty quickly to the intraday resistance at \$91.38. As I'm writing this, GLD is now up to \$91.49, the high of the day. A more telling sign would be breaking above \$91.50 on good volume.

Anyway, after clearing these puts, I'm long only on the 91 calls. Next week should be interesting as it will be the real start of Q3 2009.

In hindsight, I shouldn't long options prior to a long weekend because of the expected lack of direction and the time decay.

[caption id="attachment_1548" align="aligncenter" width="500" caption="SPDR Gold Shares"][SPDR Gold Shares][][/caption]

[caption id="attachment_1549" align="aligncenter" width="500" caption="SPDR Gold Shares"][SPDR Gold Shares][][/caption]

[SPDR Gold Shares]: http://traderpau.files.wordpress.com/2009/07/2009-07-02-gld.png [SPDR Gold Shares]: http://traderpau.files.wordpress.com/2009/07/2009-07-02-gld_prop.png

Posted 02 July 2009 in stocks.

Bought +2 Strangle GLD 100 JUL 09 91/90 CALL/PUT @3.15 ISE, GLD mark $90.11

GLD tanked further and then hovered around \$90 today. Seeing that \$90 is a major pivot point and is in the middle of a large trading range (Figure 2), I'm placing an options strangle to bet that it's going to move outside of the immediate \$90 region. The breakeven move required is below \$86.85 or above \$94.15. Which is about 3.5%.

Note the Bollinger Bands on the daily chart, Figure 1 right-side, depicting the lower and upper boundary to be \$88.30 and \$95.91. Furthermore, the Bollinger Bandwidth is near the bottom of the channel, which means volatility has been low.

I have set an alert at \$3.00 on the strangle premium. This should signal looking for an exit. However, it's obvious now that I'm horrible at setting stops on a strangle. For this trade, I'm going to treat the long and short side separately. So once a move has started, I'll place stops for the in-play side of the trade.

[caption id="attachment_1540" align="aligncenter" width="500" caption="Gold Shares SPDR"][Gold Shares SPDR][][/caption]

[caption id="attachment_1541" align="aligncenter" width="500" caption="Gold Shares SPDR"][Gold Shares SPDR][][/caption]

[Gold Shares SPDR]: http://traderpau.files.wordpress.com/2009/06/2009-06-23-gld.png [Gold Shares SPDR]: http://traderpau.files.wordpress.com/2009/06/2009-06-23-gld_prop.png

Posted 23 June 2009 in stocks.