February Gold Options Cheap?

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#1 Thu, Nov 24, 2011 - 5:01am
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: SilverDog on Nov 8, 2014 - 5:31am
Fri, Nov 25, 2011 - 11:32pm
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.

Sun, Nov 27, 2011 - 9:09pm
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.

May God Help Us All But, what do I know?
Mon, Nov 28, 2011 - 4:00am
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?

Mon, Nov 28, 2011 - 8:56am
SilverDog
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Holy smoke, they flying now,

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

Wed, Nov 30, 2011 - 11:33am
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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