Trade Alerts

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Subject Trade Alert Gold!
Date Thu, 29 Oct 2009 08:27:00 -0700
From TJ Jolicoeur <President@optioncaddie.com>


Gold has a very distinctive pattern (see attached chart) and is in a great position to have a double top in the next month or so. In the meantime it has retraced towards support for the last week. December options expire the week of Thanksgiving. The holiday weeks of Thanksgiving, Christmas & New Years provide rapid time decay for options. Traders are gone on holiday (usually week-long) so everything slows down and the extra days off mean time decay with no trading.

To take advantage of the chart pattern and the upcoming time decay acceleration, look to write some options. Sell the Dec Gold 1090 Call for 550 or better.

In looking ahead, we would like to pair this up with selling the Dec 990 Put to create a "Delta Neutral" position.

 

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