GLD - HOW AND WHEN TO SHORT IT - NEW IDEA / January 23rd EOD!0. Okay so follow along on this one, I will make it quick;
1. Last time GLD corrected, it was around the $145 Level;
2. It was September 4/6 2019, and it went from $145 to $140 in a matter of like 2 hours (just memory, I was short that day);
3. It rebounded off the $140 support level ;
4. PUT options on the $140 are dirt cheap, and GLD owners see that as support.
5. March 20 2020 $140 PUT - $38 cents a contract- so you can go 1000 shares short for $380 + fees.
6. GLD should SPIKE on January 23rd 2020. This corresponds to the Intel ( INTC ) earnings release;
7. Many believe that INTC may tank the market, as it kicked off the 2000 crash in March;
8. Algorithms are primed to either take this market to 3850, or to 3100 based on earnings ;
www.cnbc.com
9. GLD people will load the boat on the 23rd and create a blow-off top;
0. At 3:45pm you will buy GLD March 20th 2020 $140 PUT for < $30c a contract. Throw $300 at it. If you want to take a larger position, you will need a UVXY hedge to counter this unless you are okay losing the premium. But remember you have 60 days for the New Bull Market to take hold, and the Gold Hedge to Unwind. That should be plenty of time. So just buy enough UVXY to cover the $X you spend on GLD Puts. So if you spend $10K on GLD puts, you need to hedge 10K against a meltdown. You use the UVXY to do this. VXX may not be the best hedge right now, UVXY is better (can't explain right now - no time - inefficiencies in the VIX ). If the market corrects, UVXY goes from $10 to $30 in about 2 minutes. So a $1000 purchase of UVXY would be $3000. Anyway, you need a married put or call spread to do this. This is the perfect straddle. So you would also on the 23rd of January buy a married put on the UVXY . So you buy the January 31st UVXY $10.50 put for 50c or whatever, and that give you a week with total protection, against INTC and AMD . All crashes up the 31st of January will only cost you about $500 US for 1000 shares of UVXY for a week. If the market crashes you make $20000 US in about 2 minutes when UVXY spikes to $30, and that is okay, as your $500 puts are worthless, but the stock has a delta of 1.0 so whatever you sell it at, minus $500 is your profit.
1. If you do this, you need to carefully watch the market next week.
2. If INTC raises guidance or beats, or whatever happens and the stock actually goes up on a tear, then GLD is really finished. Gold would probably be around $120 by the end of March and you will be $20K richer, for just a $300 risk/reward.
3. I don't know about you, but this is a nice setup.
4. I also don't think there will be any stops along the way.
5. You need options to do this;
6. So. You can buy all the semiconductors CALLS on the March 20 Strike you like and ALL the GLD PUTS on the March 20 $140 Strike, and just hedge the whole thing over earnings for about $500 bucks. Then you know the direction, and you run with it baby!
7. If you haven't been following my AMD thread, you have really missed out. Been trading it personally and we manage an investment trust on AMD as well. We are long from ~$28 and shares will have to be pried from our cold, dead, hands...
- The AMD Whisperer
