GLD Analysis

SPDR Gold Shares (GLD)

Update 1/22/2020: GLD reached its management goal — half of maximum potential profit (49.5%) — and I exited for a $0.49 debit per share, leaving $48 profit for each 100-share contract. The stock was priced at $146.50 at exit, down $1.30 from the entry level.

GLD fell slightly on the third day of the position, and then traced a sideways pattern within a narrow range. The implied volatility rank fell during the hold period by 27.1 points, to 18.8%

Shares declined by 0.9% over 15 days, or a -21% annual rate. The options position rose by 98.0% for a +2,384% annual rate.

I have entered a short iron condor spread on GLD, using options that trade for the last time 45 days hence, on February 21. The premium is a $0.97 credit and the stock at the time of entry was priced at $147.80.

The profit zone for this position is between $154.97 on the upside and $142.97 on the downside.

The implied volatility rank (IVR) stands at 45.9%.

Premium: $0.97 Expire OTM
GLD-iron condor Strike Odds Delta
Long 159.00 89.0% 12
Break-even 154.97 83.0% 18
Short 154.00 77.0% 24
Short 144.00 78.0% 24
Break-even 142.97 82.5% 19
Long 142.00 87.0% 14

The premium is 27.7% of the width of the position’s wings.

The profit zone covers a 4.9% move to the upside and a 3.4% move to the downside of the entry price, for total coverage of 8.2%

The risk/reward ratio is 2.6:1, with maximum risk of $253 and maximum reward of $97 per contract.

By Tim Bovee, Portland, Oregon, January 7, 2020


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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