GLD Trade for Hadik
Hadik's weekly update about gold states:
"They have begun to rebound but need to produce
daily closes above 1345.5/GCM & 16.62/SIK to show
any signs of new strength and remove remaining
downside risk. More importantly, Gold needs to give a
weekly close above 1334.2/GCM to re-enter its weekly
uptrend and project new highs.
I know it may feel like we missed a chunk of the GLD trade. We needed to be cautious since Hadik had made several warnings, and now that Hadik has given us clear lines in the sand to rise into May, we can be confident in the GLD trade we put on very soon.
If we are seriously looking at a precipitous rise into May, I will design something with an excellent R/R that will take advantage. Right now, I'm looking at a GLD 140 Apr/May call calendar. I know most think of IV as declining when a stock is going up, but if you look at its history, GLD acts the opposite. I will put this on towards the end of the day if it looks like these closing levels will be breached.
Monthly Trades - Why?
Why are newsletters only released once per month?
The trades that the newsletters address are swing trades designed to address a 1 month thesis.
There are some reasons for this:
1. When the option trade lasts a month long, it is more forgiving if the trade goes against you. As the trade gets closer to expiration, the sensitivity of the trade (in other words, the gamma) increases.
2. This is a newsletter meant for people who may have another job or are otherwise not sitting at their computer all day. These trades are meant to limit risk and provide a good return while being low maintenance.
3. A thesis lasting a month has plenty of reward to leverage. It is easier to control for a risk.
4. Monthly option classes have the most volume, so it is easier to get execution on trades.
February Technical Trade Closed
These updates will be available to subscribers only starting in April.
It is time to close the USO trade at $0.16 credit.
Previous Update on USO (2/28/2018): USO has jumped almost a full dollar since the March put was sold, and has eaten into some of the profits. This was to be expected somewhat, remember this is a longer term plan. Including the profits that are locked in, you are up 38% on this trade.