Trade view /
02 November 2016 at 14:37 GMT
The GLD gold ETF is giving us a strong weekly buying signal in term of the stochastics.
Let’s buy a simple long call option and capture the trend with a potential mid-term objective of 137.53, or the 61.8% of projection of the last weekly bullish wave from 100.23 to 131.15.
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Source: Saxo Bank
Entry: buy Nov16 124 Call (expiry November 18) at $2.24 or $224/option.
Maximum profit unlimited
: if market goes to $137.53 profit at expiry will be Spot price – Strike Price – premium paid, or $137.53 – $124 - $2.24 =$11.29 or $1,129/option
Maximum loss is limited
: maximum loss at expiry limited to the premium paid
maximum loss = $2.24 or $224/option
Return on Investment at expiry if the market closes at $137.53
= profit/premium X 100
= $11.29/$2.24 X 100
— Edited by Michael McKenna
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