I want to increase my exposure to gold as its price has dropped recently. This will be a two part trade. I will sell a /GC put to collect premium and then use this premium to buy an out of the money /GC call. It’s a feel good trade in the sense that it is a nearly ‘free’ bet on a rising gold price as long as the price of gold stays above the put strike price. It’s not risk free as selling naked options can cause large losses and there is a tie up of buying power. I don’t intend on holding this trade to expiry so I will likely close it on a gold price spike.
Sold /GC Jul 1675P for a credit of 26.30.
Bought /GC Jul 1790C for a debit of 27.10
for a net trade debit of 0.80.