GDXJ Analysis

VanEck Vectors Junior Gold Miners ETF (GDXJ)

Update 7/18/2019GDXJ moved beyond its profit zone by more than a day, and I exited for a loss, for a $0.97 debit, a loss of $61 per contract, with shares trading for $39.28, up $5.02 above their price at entry. The implied volatility rate rose by 18.3 points to 100%.

GDXJ rose gently throughout my holding period until the last two days, when it rose noticeably on the first day and sharply on the second, putting the position beyond the boundaries of profit.

Shares rose by 14.7% over 16 days, or a +334% annual rate. The options position produced a 62.9% loss for a -1,435% annual rate.


I have entered a short iron condor spread on GDXJ, using options that trade for the last time 45 days hence, on August 16. The premium is a $0.36 credit and the stock at the time of entry was priced at $34.24.

The profit zone for this position is between $39.36 on the upside and $28.36 on the downside.

The implied volatility rank (IVR) stands at 80.4.

Premium: $0.36 Expire OTM
GDXJ-iron condor Strike Odds Delta
Long 41.00 91.0% 11
Break-even 39.36 88.0% 15
Short 39.00 85.0% 19
Puts
Short 30.00 86.0% 12
Break-even 28.36 90.0% 8.5
Long 28.00 94.0% 5

The premium is 18% of the width of the position’s wings.

The risk/reward ratio is 4.6:1.

By Tim Bovee, Portland, Oregon, July 2, 2019

Disclaimer

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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Based on a work at www.timbovee.com.

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