ncroadrunr 10:49 am on Thursday, June 16, 2016

$NUGT

I BTC Jun 17 $110 call for $2. sold $7.95 last week I still have the shares. I am thinking of selling next weeks $110 call for $8 – $9. My basis is $106.

To the $NUGT traders: Do you think this is a good idea or should I keep the stock unencumbered, to sell at optimum, or close, time.

Ramie 12:56 pm on Thursday, June 16, 2016

My feeling about NUGT is that it should never be held without being covered by calls. And even in that situation I probably would be overwriting the calls. The whipsaws and long term headwinds can destroy a long position over any real length of time. In this particular case (selling calls for next week), they won’t be of much help if gold reacts negatively to a “remain” outcome in the Brexit vote next week. If that were to happen, gold could retrace and NUGT would get crushed. At a minimum I would be covered but more than likely I wouldn’t be long the stock (I am short calls and out of the money puts now). Just my 2 cents.
- ncroadrunr 1:53 pm on Thursday, June 16, 2016
  
  Thanks for the reply Ramie. I did remember the Brexit vote is next Thursday, so I didn’t want to have a covered call because I felt trapped today when the price spiked, along with the call. Result was net loss compared to simply getting called away. My thought was NUGT will jump around enough between now and Thursday’s vote to allow me a profitable exit. But it could easily have already decided gold is overvalued and plummet from here. I don’t have a sense of response on this security. I opened the covered call last Friday with a conservative, I thought, covered call for a day trade. The price fell and I still had stock on Monday. Now I am lowering my basis through selling calls. I’m simply looking for feedback on my thought process. It is times like this I let losers run or cut rebounding profits short. Which is this?