Long GDX 26.5 Call expiring 9 Sept @ 1.84 (bid)
Short GDX 27.5 Call expiring 9 sept @ 0.97 (ask)
Current P/L: +0.87
I'll be closing the call spread on GDX I opened last Wednesday for a profit of 87 cents per share, or a gain of 262.5%.
Rationale:
This trade met its intended objective, which was meant as a play on a weak US jobs report. The underlying, GDX, has also reached the target price, closing above $28.
In light of a rebounding USD (and hence falling gold and by extension GDX) and with only 2 more trading sessions till Friday expiry, I've decided to take profits on the trade, in case the market turns against me later this week.
Trade review:
To be honest, this trade turned out a lot better than I expected. An unexpected boost to gold prices came in light of very weak ISM manufacturing data, released on Tuesday, which put more pressure on the US dollar and boosted gold prices further.
While I was tempted to book profits on the trade as early as Monday, I decided to hold on for a bit longer as the rally in gold prices seemed able to continue.
While I'm definitely glad the trade turned out so spectacularly well in the end, I still think it was a high-risk, high-reward one. One should not put down more than small amounts of capital as the risk of loss is very high.
No comments:
Post a Comment