Gap and Go In GLD

[Steven Place]

GLD is breaking out to new three month highs. The chart pattern could be viewed as an inverse head and shoulders, or a cup and handle.

Since the shiny metal did gap up, I don’t want to be super aggressive here– that means instead of calls I will do call spreads.

Buy GLD Mar 122/130 Bull Call Spread at 2.50

If we see a pullback I will buy to close the 130 calls and just be left with the 122 calls.

If we continue to rally I will hold onto them, potentially rolling from a vertical to a calendar if it keeps performing well.

If we lose 120 then it’s a failed breakout and I will bail.

[Steven Place]

GLD is spiking up into its 2nd standard deviatino bollinger band, which has been a pretty reliable overbought indicator for the past 12 months.

I’m going to scale half here and look to reenter that half on a pullback.

[Steven Place]

GLD is gapping above above its 2nd standard deviation bollinger band. It’s now overbought, so I want to take a little more risk off the table.

Sell the Mar 130/134 Bear call spread for .70 or higher.

[Steven Place]

Going to close out here as the theta rewards aren’t justified by the gamma risk.

That simply means we have the potential to make more money on the trade if GLD goes nowhere, but we can lose our gains if GLD sees a big move.

[Author]

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