Profitable Trades on Gold Stocks: SPDR Gold Trust ETF (GLD)
Click to Enlarge SPDR Gold Trust (ETF) (NYSEARCA:GLD) has been choppier than it should be, but I can still find levels against which I can sell risk. I want to go long GLD, but not by chasing a price target. Instead, I will sell downside risk against proven support.
The Trade: Sell the GLD Sept $106 put. This is a bullish trade for which I collect $1.10 to open. There’s a 90% theoretical chance of success by having GLD close above the strike price. If the GLD stock price falls below it, though, you’ll be committed to buying GLD shares at $106.
For milder risk profiles I can modify this trade into a Sept $106/$104 credit put spread and still yield more than 20% on risk.