GDX Analysis

VanEck Vectors Gold Miners ETF  (GDX)

Update 11/21/2019I’ve exited my short iron condor position on GDX for a $0.29 debit, producing a $0.31 profit on the options, with shares trading at $27.14, up $0.25 from their entry level.

GDX traded within a narrow range during the lifespan of the position. I exited at 51.7% of maximum potential profit, with the implied volatility range at 18.4%, down 25.6 points from its level at entry.

Shares rose by 0.9% over 16 days, or a +21% annual rate. The options position produced a 106.9% return for a +2,439% annual rate.

I have entered a short iron condor spread on GDX, using options that trade for the last time 45 days hence, on December 20. The premium is a $0.45 credit and the stock at the time of entry was priced at $26.89.

The profit zone for this position is between $29.60 on the upside and $23.60 on the downside.

The implied volatility rank (IVR) stands at 44.0.

Premium: $0.60 Expire OTM
GDX-iron condor Strike Odds Delta
Long 33.00 96.0% 6
Break-even 29.60 86.5% 16
Short 29.00 77.0% 26
Short 25.00 79.0% 20
Break-even 23.60 87.0% 12.5
Long 23.00 95.0% 5

The premium is 20.0% of the width of the position’s wings.

The profit zone covers a 9.4% move to the upside and a 14.6% move to the downside of the entry price, for total coverage of 24.0%

The risk/reward ratio is 4:1, with maximum risk of $240 and maximum reward of $60 per contract.

By Tim Bovee, Portland, Oregon, November 5, 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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