Gold Strategies

I was curious to find out how forum member approach the gold markets? Margins tend to be fairly high compared to the other markets, and in recent months price swings can be up to 30 points per day.

Just a little discussion starter as GC is one of my favorite markets to work with:)

I have traded gold futures, but they have been dangerous and I get stopped out often in my short-term trading.

I also use ETF's.

I usually trade gold, rather than invest.

I sold all my GDX for LT cap gains last week. I don't plan on dabbling in the gold market again until it goes below 1000, which it will once the deflation debate gathers hot air. One thing I found about Gold is to not fall in love with the story behind it. I think there will be many a buy and holders in gold created when this run is all over.

I stick to ETF's for gold and a few juniors to play on gold with GLD only in the Roth IRA. At least GLD tracks gold relatively well, unlike the nightmare futures ETF scenarios of UNG, UGA, USO, DBA...

How do you roll in the Gold market JEL?

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Originally Posted by Bullitt

I sold all my GDX for LT cap gains last week. I don't plan on dabbling in the gold market again until it goes below 1000, which it will once the deflation debate gathers hot air. One thing I found about Gold is to not fall in love with the story behind it. I think there will be many a buy and holders in gold created when this run is all over.

I stick to ETF's for gold and a few juniors to play on gold with GLD only in the Roth IRA. At least GLD tracks gold relatively well, unlike the nightmare futures ETF scenarios of UNG, UGA, USO, DBA...

How do you roll in the Gold market JEL?

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In my opinion the gold market has too many drastic swings to take outright positions.

My favorite strategy for gold is identifying a very solid overall up-trend on daily charts and selling short options far out-of-the-money, then collecting premiums close to expiration.

This strategy tends to be fairly unattractive to a lot of traders who look for more excitement in shorter term strategies, but when roughly 80% of options expire worthless you are able to work with very good probabilities.

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Originally Posted by JEL_Futures

In my opinion the gold market has too many drastic swings to take outright positions.

My favorite strategy for gold is identifying a very solid overall up-trend on daily charts and selling short options far out-of-the-money, then collecting premiums close to expiration.

This strategy tends to be fairly unattractive to a lot of traders who look for more excitement in shorter term strategies, but when roughly 80% of options expire worthless you are able to work with very good probabilities.

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A little update on this thread. Although I always like to sell options in gold I recently(about 2 weeks ago) designed a Bull-Call Spread in gold. I bought 1135 call and sold 1150 call.

A few days after I got involved in this spread, WAAALAAA...gold jumped over 1150.00 and my daily chart suggested a steep up-trend would continue.

A few days after that, plummeted to around 1120.00 and has been bouncing around in the 1130.00 range ever since.

I still have plenty of time for the spread to work out, but this 4 week old up-trend keeps getting softer and softer....I guess I shouldn't have overlooked the initial credit spread I made for this trade too:rolleyes: