Thursday, March 15, 2012

$GLD managing trade

2/10: I sold to open (STO) $3-wide Mar $GLD iron condor 162/159 - 176/179. I did this 17x + collected $1.05 for each.
Honestly, I fell asleep at the wheel and got surprise bu the recent tumble of gold.
Obviously, the lower leg (credit put spread) is in trouble.
I could have closed it today for a loss of about $.50 (not a disaster but still a loss).
I still think that gold should be heading up especially amidst this recent acceleration in the widespread lack of fear.
I didn't want to take the loss. I also did want to wait until tomorrow because premium on the 159 (protection) put asset would crash relative to the leg that is ITM (162).
So, I punted it for another week. I was also able to reduce my count to 15x.

3/15: punted (BTC 17x mar 162/59; STO 15x mar25 162/59 for small credit)
I left the Mar credit call spread as is to expire worthless (maximum profit on that leg)

This is a calculated risk on my part and feel comfortable enough that I can punt out of trouble again next week in case i am wrong abt gold.