GLD Analysis

SPDR Gold Shares (GLD)

Update 9/27/2019I exited my short iron condor on GLD 21 days prior to expiration, the point at which, under my rules, I exit winning positions. I exited for a $1.54 debit so the profit is quite small, only five cents, with shares trading at $141.42, down $4.43 from the entry price.

The exit was at 3.1% of maximum potential profit with an implied volatility rank of 63.3%, down 16.5 percentage points from entry. The stock began a four-day decline on the second day after entry, ending below the put strike price in the short iron condor position, and then meandered along that boundary until the day I exited.

Shares fell by 3.0% over 23 days, or a -48% annual rate. The options position produced a 3.3% return for a +52% annual rate.

I have entered a short iron condor spread on GLD, using options that trade for the last time 44 days hence, on October 18. The premium is a $1.59 credit and the stock at the time of entry was priced at $145.85

The profit zone for this position is between $155.59 on the upside and 136.59 on the downside.

The implied volatility rank (IVR) stands at 79.8%.

Premium: $1.59 Expire OTM
GLD-iron condor Strike Odds Delta
Long 165.00 95.0% 6
Break-even 155.59 87.5% 13.5
Short 154.00 80.0% 21
Short 141.00 77.0% 23
Break-even 136.59 86.0% 14.5
Long 135.00 95.0% 6

The premium is 18.7% of the width of the position’s wings.

The profit zone covers a 6.7% move to the upside and a 6.8% move to the downside of the entry price, for total coverage of 13.5%

The risk/reward ratio is 4.3:1, with maximum risk of $691 and maximum reward of $159 per contract.

By Tim Bovee, Portland, Oregon, September 4, 2019


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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