AprWk3 - GLD closed at $135.47. Interestingly, GLD was a terrible mess the whole week. Last Friday saw one of the most bearish one day drops in a long time. This scary bloodbath was repeated, and doubled on Monday trading day with a continuation of the bearish sentiments. GLD dropped $18+ in a matter of two days.
Premiums were stressed beyond belief, and fears renewed. It was the perfect moment to sell a spread. Either Put or Call spreads were offering unbelievable premiums. All that was left was my appetite for risk and how much I wanted to profit from the market. Of course high risk equals higher losses, and this is evident even in the weekly options game.
You got to respect the market, and play your cards carefully. Any wrong moves could result in a terrible cut loss situation, and set you back by at least 4 weeks in your quest to making profits weekly. On Friday, GLD open higher but ended lower. However, the low was higher than the close on Thursday.
Why is this so? I don't really know at this stage. All I can say is, GLD took a beating this week, and this is evident in the charts above. I said all that to say that even in the bleak situation above, if you can spot an opportunity, you can still sell a spread.
I sold a GLD Call Spread $136.5/137.5 for a premium of $0.07. The trade was filled, and it expired worthless. Return on investment was 4.95% for the week. ;)
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