Its been a very bumpy ride for both gold and silver bugs of late as prices were pounded relentlessly. However, we did manage to close out a profitable trade generating a profit for our subscribers. Its nice to finish the year with a win as this could well be our last trade for the year, but don't bet on it just yet.
With US real rates indicating that gold may be undervalued, SK OptionTrader closed a bullish vertical put spread with a profit of 22.60%. An investment of just $1000 in this trade would have generated $226 in profits. This would easily pay for a 6 month subscription.
Following our expectations for gold to rally to over $1800, on the 18th July we signalled to our subscribers to “... sell the GLD Dec-11 $145/$140 Vertical Put Spread at $1.13. This trade involves buying the GLD December 17th 2011 $140 puts and selling the GLD December 17th 2011 $145 puts for a net credit of $1.13. We are allocating 10% of our capital to this trade.”
After gold went to over $1800, we felt that the risk reward dynamics were still in favour of the position. As such we held the position until expiration on the 17th December, saving our subscribers the commission costs of closing this position manually. Therefore we have kept “...our $1.13 net credit and bank a 22.6% return on this trade.”
The graph above shows that between the position being opened and its expiration that gold moved less than $1.00, which demonstrates the power of Theta, or time decay as it worked in our favour.
Through the use of this vertical put spread, SK OptionTrader made profits of 22.60%. This shows that options are one of the best vehicles to access the gold market.
Currently the SK OptionTrader model portfolio is up 384.33%, which means a $10,000.00 portfolio invested in accordance with SK OptionTrader signals would now be worth $48,443.00. On average our positions gain 36.42% in 49.25 days, which provides an annualized return of 94.73%. If you would like to see a full record of our previous trades, feel free to check out our trading record. With exciting new opportunities like this arising, now is the perfect time to open a subscription with SK OptionTrader and begin increasing the profitability of your trading portfolio.
For those subscribers who are too busy to trade their own accounts we are now able to offer an autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and eOption, therefore auto trading is now available for SK OptionTrader signals.
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