February Gold Options Cheap?

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SilverDog
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February Gold Options Cheap?

After nearly losing all my Spread trading cash after Morgue smack-downs, I am done with regular Spreads and have been giving Options a try (Puts and Calls), though I have to admit right away, I find them hard to understand as I have problem with arithmetic.

I have been buying S&P500 January Puts, at the most expensive Strike-Prices I can afford (sometime $700-$800 each), and within a few days each has made over a cool thousand for me, helping recoup some of my earlier losses, but not at break-even yet.

I have been looking a Gold Calls way out to February and note the low prices to buy Gold Calls at around $2000.   Each Option costs me around $66 each last time I bought - though now they are slowly rising.

I'm buying more of these each time I make money from the S&P500 Puts - Can I run it past some of you folks' thoughts if I am doing risky business?  I feel $2000+ Gold by February next year seems very likely, and these Calls seem a good way to make potentially a lot of money for limited risk.

Just an old dog tryin to get my money back 

Edited by admin on 11/08/2014 - 06:31
DavidSilverSwe
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just a word of caution. 2000

just a word of caution. 2000 gold sounded like a safe bet a while back too, now it's the same time frame applied toward february instead. A lot more BS could hit the metals market, so i wouldnt like an all in approach to these trades, but I like the thinking and im in similair trades myself.

Brotha Bob
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Options on futures?

I assume you are buying options on futures. It does not sound like a bad bet. Options are riskier but you might do well.

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May God Help Us All

But, what do I know?

SilverDog
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End of market last week, one

End of market last week, one of my February Gold calls was showing profit of a few hundred Dollars.

I notice today, we had a good rally in Gold price, yet all the profit has vanished from all my Feb Gold calls.

I know Options aren't simple, but can someone explain to me in layman's terms, why my February Gold calls lost value when the price of Gold shot up today?

SilverDog
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Holy smoke, they flying now,

Holy smoke, they flying now, the dogs eat steak tonight  ;-)

SilverDog
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Wow, old dog finally done

Wow, old dog finally done good.  It worked man, it really worked.   I'm buyin more, this beats getting stopped-out on Spreads any day.  Lookin at some February Crude calls now, same reasons as the Gold calls...

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