Is Gold a bubble or the trade of a lifetime?

Maybe both.

I have not been in the gold trade myself. But several of my members are, and doing very well so far.

Here is a chart provide by one such member. It shows that the stock of gold companies, miners, etc continue to appreciate evn though gold prices peaked earlier. If this hold true this time, even if gold has peaked, which it does not look like it has, the miners will continue to rally.

Last week a member emailed saying that it looked like GLD had topped out and would I consider selling calls. My answer: No Way.

This train still has momentum on its side as you can tell from the rally today. What I did do on Friday, was to buy a debit spread in GLD.

I bought the Jan 115 Calls and Sold the Jan 118 Calls. I paid about $100 [...]

The results are in.

For October 2009, OptionGenius.com was  + 2.72%.

Not very impressive is it. But the S&P was down -1.98%.

Trade #4 for the month was rolled forward to November. If I had not rolled it, it would have expired worthless and with a profit. Instead it is now  November Trade #3.

Both iron condors did great in October. I took a more conservative stance this month because of October usually being a very bad month for the markets. And this one did not disappoint.

It started out smooth, then dropped towrdas the end of the month, then reversed and rallied up just as fast as it had dropped.

Can you saw “whipsaw?”

But  both condors did great with no adjustments required. What really hurt was an IWM butterfly that busted my chops. If I had just put that trade on and forgot about it, it would have been profitable, but alas, that’s not [...]

An astute member brought Amazon (AMZN) to my attention a week ago. After some uncertainty, I think AMZN is going higher or at least will not come back to the level it was at before earnings. At least until after DEC expiration. So that makes a Put credit spread a good  bet.

Sell the Dec 115 Puts and Buy the 110 Puts. My software is showing you can get this for .64 credit each.  That would be a 14.4% profit. DEC expiration is 12/19. If you can take the trade off for .10 debit, do so.

The expiration day breakeven on this trade is 114.34 and it has a 92.84% probability of success.

Here’s a quick and easy trade.

Buy Dec 590 Call, Sell Nov 590 Calls for a debit of 10.65 per spread.

If you do just one contract, it will cost you $1065 plus commissions. If RUT does not move much by Monday you should have over a 10% gain. Even if it moves about 8 points either way, you should still have close to a 10% gain.

This is a great trade to papertrade.

RUt Calendar Spread Graph

LEAPS refers to Long Term Equity AnticiPation Security.  These are options that consist of longer terms than average, as in the date of expiration.  LEAPS are not as common as other options but are still available on roughly 2,500 equities and 20 indexes.  However, like short-term options, LEAPS are also available for calls or puts. 

Options for LEAPS are traditionally created with expiration cycles of three months, six months or nine months, with no option term exceeding a year’s worth of time.  While there might be some exceptions now, traditional LEAPS are still the majority.  LEAPS are relatively new to the market and may extend as long as 2-3 years out.  As is the general rule, the farther away the expiration date, the more expensive the option is.  LEAPS are also available for indices now, as opposed to merely equities.

LEAPS are popular tools of investors who hope to reduce their risks.  [...]

Are you wondering which is better: option trades that result in a credit or trades that result in a debit?  Simply put, you’re asking whether you should choose a credit spread or debit spread strategy.  Let’s consider both options in more detail. 

A credit spread (also called a net credit spread) involves the investor selling one option then buying another option.  The second option is in the same class and also shares the same expiry date.  However, there are different strike prices between the two options.  In this instance, the new investor gets a net credit for entering this position.  He is looking forward to the spreads either narrowing or expiring in order to get a profit.  A credit spread is basically a conservative strategy in investment.  It is designed to earn a moderate level of income while also limiting your potential loss.  In this circumstance, you are buying and selling [...]