Yesterday, GDX broke the resistance area around $32.9 and I decided to buy to close all my positions at 0.85c/contract. It gave a small gain of $30 at the end, although I was totally swimming against the direction. That is the beauty about selling naked puts. It still may be a good deal and with the time decay after option expiration today, that trade should have done fine but I thought if a sell off is underway, GDX will also be one of them as people will want to cash their gains, plus there are many people talking about gold at 800, and there is still no sign of inflation, etc. I would watch GDX again and may also consider buying call options on a good gold stock. Nevertheless, this experiement with GDX shows how useless sometimes it is to buy out of the money options. When I sold the GDX puts, GDX was trading around $34.5 for 0.9c/contract. When I bought them yesterday, GDX was around $32, with put options at 0.85c/contract!
Anyways, I am now mostly in cash with MAR options and CTIC. I may stay away from selling naked puts for a while until I find more clear directions. Instead, I am looking for buying options that can move.
I am now thinking of a trading idea for apple. The $150 May options are still attractive to me. I am still looking to pick one if there is a pullback. I still don't have a good bearish idea in mind. One way to hedge is with AAPL July $70 put options??
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