Comments on: Will Gold Break $1250 by 2011?

By: Bearlyinvesting

Bearlyinvesting — Mon, 16 Jan 2012 06:24:17 +0000

Would have been a really good bet.

By: Bearlyinvesting

Bearlyinvesting — Mon, 02 May 2011 08:07:49 +0000

Would have been a good bet.

By: nicole

nicole — Thu, 30 Dec 2010 06:13:36 +0000

now look where it is joe

By: JOE

JOE — Fri, 01 Oct 2010 18:25:05 +0000

Thanks for finding me and writing in. This article was the result of someone insisting that gold was still heading up, and my offering what I saw as the most profitable way to bet on his hunch. We have three months before I pat myself on the back, though. In general, I like the concept of the call spread. Your upside is quite high, a 25% move up creating a 400% return, and your downside, capped. Were gold to crash to $400, you’d have lost less, assuming you didn’t pull the same funds up.

By: buygoldsilver.org

buygoldsilver.org — Fri, 01 Oct 2010 15:39:35 +0000

I was fully (100%) in when you wrote this a year ago, gold bought on 21 Oct 09 would have cost you $1050 oz, today $1320ish.

I only wish I’d seen this the day you wrote it, I’d have taken those 4 to 1 odds and multiplied my 25% (from the gold) by them.

next time you want to give those kind of odds against the inevitable rises still to come, please think of me and I’ll take the other side of your trade

By: Kidgas

Kidgas — Mon, 21 Jun 2010 19:18:56 +0000

Personally, no I would not. I am bullish on gold but not necessarily about the timing. I am looking several years out and with 6 months to go think that anything could happen.

I am into collars and like to sell near term calls taking advantage of the rapidly declining time value as options near expiration. So, this trade is actually counter to what I would typically do.

By: JOE

JOE — Mon, 21 Jun 2010 14:23:57 +0000

Yes, a Bull Spread. Curious though, you’d not be willing to hang in to double the return from here for a flat move in 6 months?

By: Kidgas

Kidgas — Mon, 21 Jun 2010 14:04:06 +0000

OK, now that it’s morning I have re-read the post. It looks like a bull call spread and that right now you would have doubled your money. Now may be the time to get out since we know that gold has the potential to be quite volatile. You have maximized the profit based upon price at this time and are waiting on time decay for the rest of the profit. Not worth the risk in my opinion at this point.

By: JOE

JOE — Mon, 21 Jun 2010 13:42:13 +0000

The 115 strike ($1150 gold) is at $13.50 and the 125 strike, $8.50.
The spread has moved from $240 where I made mention of it, to $500. This, as gold rose from $1034 to $1228.
A new entrant would see a 2X return betting that gold will still close above $1250 in Jan ’11.

Note – I am not advising either way on this trade, the original post was in reply to readers asking about Gold breaking $1250, this option spread seemed a better return for those so sure the $1250 was inevitable.

By: kidgas

kidgas — Mon, 21 Jun 2010 03:41:06 +0000

Now that gold is over $1250, how is this trade working out? Did it turn out like expected? Again, it is too late for me to look up all the numbers but would be curious to see a follow-up post. I am encouraged by the futures tonight with the Chinese revaluation. Hoping for a strong stock market tomorrow.