GLD Calendar Option Spread Update 9/29/10

GLD Calendar Option Spread

Here’s an update on GLD calendar option spread. Ok so GLD has continued to drift higher. It hit the upside breakeven of the calendar today and then pulled back a few cents. Time to add the adjustment. I added the 128 Oct/Nov Calendar in the same amount of contracts as the original. This doubled the amount of money in the trade.

Here’e the graph:

Calendar Option Spread

After Adjustment

Notice the break evens have moved to 123.61 and 129.59 on the upside.

The amount of money I have in the trade is now $2990 and so far I am down $85 since the trade has been opened. I am still looking to make 10-15% on the trade.

Calendar option spread strategy

If GLD pulls back to 126 I will be sitting pretty. If it continues to advance I will make a move  when it gets to 129-129.50. And the adjustment I will make is to take off the first calendar – the 125 Oct/Nov. That will then reduce the amount in the trade and move my breakevens higher.

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