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Trades of the Day: SPDR Gold ETF (GLD)

Gold surges as conflict in Ukraine and Middle East continues


The markets are moving nicely higher this morning, but my indicators are all saying that there is a lot of volatility in this market and that we are still in a transitional period. That means that the waters are too murky to confidently sit on the side of the bulls or the bears in the short term.

In situations like this, and with the August slump underway and geopolitical events in the Ukraine and the Middle East adding uncertainty, the price of gold is firming up—it’s no secret that gold is a safe haven during tumultuous times.

That’s why for today’s Trades of the Day I’m recommending three gold trades you can make now.

This week, we’re seeing a surge in SPDR Gold Shares ETF (GLD). The time-cycle forecast for GLD is bullish for the next nine days.  This is opening the door to a few potentially high-profit option trades.

SPDR Gold Shares ETF (GLD)

The first trade I’m recommending today uses options as a stock substitute.  The trade is as follows:

Buy to open the GLD Nov. 124 calls (ticker symbol GLD141122C124) for $3.80 or less.

The second trade has less risk, with a maximum profit of $2.25 and a maximum loss of $2.25.  The trade is as follows:

Buy to open the GLD Nov. 123/128 debit call spread (ticker symbols GLD141122C123 and GLD141122C128) for a debit of $2.25.

The third trade is for sophisticated credit sellers only.  These trades have higher margin requirements and are considered riskier.

Sell to open the GLD Sept. 124 puts (ticker symbol GLD140920P124) for a credit of $1.50.

If the underlying ETF, GLD, trades down by $3.25, exit the first two trades. If GLD trades up by $3.25, exit the put credit trade.  All trades are to be exited by Thursday, Aug. 28.

Mike Turner is an engineer turned entrepreneur with more than 20 years’ experience in systems development and enterprise-level software applications and 15+ years in finance and stock market strategies. He is the founder of Signal Investor and Turner Analytics.

Mike’s background in finance, computer science and engineering provide a solid foundation for Signal Investor’s rule based trading approach. Turner Analytics provide members with access to the software Mike created and uses to make his stock, option and trading recommendations.Click here to get Mike’s unique take on stocks through technical and fundamental analysis.

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