GLD Analysis

SPDR Gold Shares (GLD)

Update 2/27/2018: GLD trended downward in line with its Elliott wave count and its Fisher Transform signal. I exited at 41.2% of maximum potential profit for a $-.38 debit. Shares stood at $125.04 upon exit.

I intend to re-enter GLD if the downtrend continues, continuing a series that began in October 2017.

Shares declined by 0.7% over six days for a -43% annual rate. The options position produced a 68.4% return for a +4,162% annual rate.

I have entered a bear call vertical spread on GLD, using options that trade for the last time 23 days hence, on March 16. The premium is a $0.64 credit and the stock at the time of entry was priced at $125.94

I made the decision to enter the trade in my account based on its decline from the high of Feb. 16 and a downtrend signal from the Fisher Transform. 

Implied volatility stands at 13%, which is 7/10s of the VIX, a measure of the volatility of the S&P 500 index.

GLD’s IV stands above 68% of the symbol’s IVs of the past year, and in the 57th percentile of its most recent broad movement.

The price used for analysis was $126.02.

Premium: $0.64 Expire OTM  
GLD-bear call spread Strike Odds Delta
Long 128.50 73.4% 28
Break-even 125.86 64.6% 37
Short 126.50 55.7% 46

The premium is 64% of the width of the position.

The risk/reward ratio is 2.1:1.

The bid/ask spread was 4.8%.

By Tim Bovee, Portland, Oregon, Feb. 21, 2018


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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