Home› Precious Metals

I just broke my own rules!

SpoolySpooly Posts: 2,108 ✭✭✭
in Precious Metals
I never short a bull market.

I covered my gold holdings with put options today.

Seems like the gold market is going parabolic....... leads to another rule..... always sell sell sell into parabolic moves!

I don't want to sell gold, but I want to protect my profits also.

Is the gold market making me crazy!!??
Si vis pacem, para bellum

In God We Trust.... all others pay in Gold and Silver!

Comments

  • jmski52jmski52 Posts: 22,822 ✭✭✭✭✭
    I've never understood the distinction between selling some bullion and shorting a bullion position.
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • BaleyBaley Posts: 22,660 ✭✭✭✭✭
    Correct me if I'm wrong, Spooly, but you bought puts, right? I'm assuming they're currently out of the money and will stay that way if gold keeps going up. What's the price and expiration date?

    Liberty: Parent of Science & Industry

  • piecesofmepiecesofme Posts: 6,669 ✭✭✭
    You've got bigger ones than me Spooly. About a week ago, I said here that I expected Ag to head down, at least a little bit, but I didn't do anything in the market, I just said it. So what, I was wrong about it. But to actually lay $ out saying it's going down doing what it's doing? All I can say is, I wish you the best of luck.
    I actually want Au & Ag to go down, for 2 reasons. Because I think it needs to at this point in order to go even higher, and because I'd like an opportunity to buy into that eventual run.
    To forgive is to free a prisoner, and to discover that prisoner was you.
  • mrearlygoldmrearlygold Posts: 17,858 ✭✭✭
    Not me
















    But I AM looking for the big bars image

    Coin's for sale/trade.


    Tom Pilitowski
    US Rare Coin Investments
    800-624-1870

  • percybpercyb Posts: 3,324 ✭✭✭✭
    Never sell or trade your best players.
    "Poets are the unacknowledged legislators of the world." PBShelley
  • gecko109gecko109 Posts: 8,231 ✭


    << <i>I've never understood the distinction between selling some bullion and shorting a bullion position. >>





    Agree 100%. If you are worried about evaporated profits in a possible future downturn, why not just liquidate some of your bullion to "lock in" those profits?


    To me, it seems like "hedging" is akin to playing $1/number on every red number on a roulette table....and then placing an $18 bet on black, and a $2 split bet on 0/00. Whatever happens, you cannot make any profit, only a small loss.

    So if you are up $200 at that table from earlier, more aggressive wagering......and were concerned about losing it back on a cold table.....would you do the above, or would you just put $50 of that $200 in your pocket to guarantee a profit?
  • piecesofmepiecesofme Posts: 6,669 ✭✭✭
    Phil, when you start giving those riverboat analogies I know where you went this past weekend LMAO!
    To forgive is to free a prisoner, and to discover that prisoner was you.
  • gecko109gecko109 Posts: 8,231 ✭


    << <i>Phil, when you start giving those riverboat analogies I know where you went this past weekend LMAO! >>





    I only play poker.....its the only game in the casino that a person can beat in the long run. And I do not beat the game, but I sure have fun!
  • piecesofmepiecesofme Posts: 6,669 ✭✭✭
    I only play poker.....its the only game in the casino that a person can beat in the long run. And I do not beat the game, but I sure have fun!
    Yeah, I could see you sittin there with your poker face on lol. I usually play Carribean stud or Roulette. I know, 2 losers, but I have won big on both a few times over the years so I guess those 2 have sucked me in when I do go, which isn't very often anymore.
    To forgive is to free a prisoner, and to discover that prisoner was you.
  • SpoolySpooly Posts: 2,108 ✭✭✭
    I just hedged my positions. If gold goes up my bullion value increases and my options expire worthless. It's break even. (Loss limited to the cost of the options) But if the price of gold declines then my bullion decreases and my options increase in value......break even.

    I'm choosing to sit on the sidelines without selling physical gold. Puts expire in November time will tell.

    This market IS making me crazy! image

    I would like to buy more gold..... but I don't like chasing the market. Gold has to correct sooner or later.


    Si vis pacem, para bellum

    In God We Trust.... all others pay in Gold and Silver!
  • reddwingreddwing Posts: 137 ✭✭
    So spooly, you bought November puts at what strike price? Did you do this on the ETF (GLD) or strictly on gold bullion?
  • WingsruleWingsrule Posts: 3,010 ✭✭✭✭
    If it helps you sleep better, it was a good move.

    As far as (not) selling off a protion of your holdings, you don't have to worry about capital gains and getting whipsawed by premiums trying to sell and buy back in.

    Just a few more things to consider based on an individual's specific situation.
  • SpoolySpooly Posts: 2,108 ✭✭✭
    Nov Puts on GLD, I'm keeping how many and what strike prices to myself. image
    Si vis pacem, para bellum

    In God We Trust.... all others pay in Gold and Silver!
  • WingsruleWingsrule Posts: 3,010 ✭✭✭✭
    Nov 185 puts (at the money) are at $10.50 or so.You might be on to something.image
  • reddwingreddwing Posts: 137 ✭✭
    Oh come on. Help us out here!
  • DorkGirlDorkGirl Posts: 9,994 ✭✭✭
    Sorry, no help here.image
    Becky
  • WingsruleWingsrule Posts: 3,010 ✭✭✭✭
    Very nice call, indeed!

    Or should I say, nice put?
  • BaleyBaley Posts: 22,660 ✭✭✭✭✭
    wonderful timing Spooly, congrats!

    Liberty: Parent of Science & Industry

  • jmski52jmski52 Posts: 22,822 ✭✭✭✭✭
    Wow, Spooly! You da man!image
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • SpoolySpooly Posts: 2,108 ✭✭✭
    Banemorth - Thanks for the correction.... The market is still making me crazy! image


    "Even a broken clock is right twice a day." I have had to move my stops 3 times today to lock in profits. I'm still taking a beating on my bullion. image
    Si vis pacem, para bellum

    In God We Trust.... all others pay in Gold and Silver!
  • BanemorthBanemorth Posts: 986 ✭✭✭


    << <i>Even a clock is right once a day! I have had to move my stops 3 times today to lock in profits. I'm still taking a beating on my bullion. image >>



    I think it's "Even a broken clock is right twice a day." imageimage

    Good job on the market call!
    Justin From Jersey

    Successful Transactions With: JoeLewis, Mkman123, Harry779, Grote15, gdavis70, Kryptonitecomics
  • cohodkcohodk Posts: 19,102 ✭✭✭✭✭
    Nice trade Spooly.

    Charts dont lie.image
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • SpoolySpooly Posts: 2,108 ✭✭✭
    I got stopped out of all my puts today. I think after taxes I will break even. image
    Si vis pacem, para bellum

    In God We Trust.... all others pay in Gold and Silver!
  • RedTigerRedTiger Posts: 5,608 ✭


    << <i>I got stopped out of all my puts today. I think after taxes I will break even. image >>



    You still have the physical gold no? If so, if gold goes back up, seems to me that you'll have your cake and get to eat it too? If you sold your gold when you sold your puts, I don't understand why you just didn't sell some of the gold to begin with instead of complicating matters with options. Break even after that fancy footwork and near perfect timing on purchasing puts is a confusing result. If the profit from the sold puts paid for your taxes on the gains on the gold, that is a LOT better than breaking even.
    Investment blog: gold, stocks and more
  • WingsruleWingsrule Posts: 3,010 ✭✭✭✭
    RT,

    I read this as:

    Put profit - put taxes - (paper) physical loss = 0.

    Spooly,

    How'd I do?
  • SpoolySpooly Posts: 2,108 ✭✭✭
    Yep, made money on the puts, I sold no gold bullion. I should have bought MORE puts... $$$.... anyway it was all luck. Tomorrow the market will crush me.
    Si vis pacem, para bellum

    In God We Trust.... all others pay in Gold and Silver!
  • RedTigerRedTiger Posts: 5,608 ✭


    << <i>Yep, made money on the puts, I sold no gold bullion. I should have bought MORE puts... $$$.... anyway it was all luck. Tomorrow the market will crush me. >>



    With gold on the rebound today (Friday) it looks like you danced between the raindrops with a huge winner on the put trade and now physical is going back up too. Way to go. Do that enough times, and a person wouldn't need to worry about hedging. Good that you are humble too, if a person thought it was skill, that person might think they could hit grand slam home runs every time they bought options and become addicted.
    Investment blog: gold, stocks and more
Sign In or Register to comment.