Wednesday, September 02, 2009

Buy GLD (vertical call spread)

Buy GLD via buying a vertical call spread

Spread consists of: Long Oct 95 call, short Oct 105 call, with GLD around 94.69

GLD moving up, nice looking pennant, moving up through resistance, textbook chart. I'm doing a vertical spread to protect against downside. Pennants sometimes break to the downside. Selling the 105 call helps a bit with cost and time decay on the October options, while giving up the upside if GLD goes higher than 105.

Long GLD

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