Big change in strategy here with much lower risk. Moving #PerpetualRollingStrangles over to a Whiz #SyntheticStock out in 2020. Same amount of margin required and taking away the naked risk of the strangles. This should also be a nice hedge in a market meltdown if everyone runs for safety.
Sell to Open GLD JAN 17 2020 122.0 Puts @ 7.65
Buy to Open GLD JAN 17 2020 122.0 Calls @ 12.45
Disaster puts fairly tight:
Bought to Open GLD JAN 17 2020 120.0 Puts @ 6.85
This gives a net debit of 11.65 for the Jan 2020 position. Add the 2 point max downside and get a max loss of 13.65. I did have to close my current strangles at a small loss too:
Bought to Close GLD DEC 15 2017 125.0/118.0 Inverted Strangles @ 7.30 debit (sold for 4.20)…
That’s a loss of 3.10 but at half size of the new position so I’ll add 1.55 to my basis in the new position. This will also allow me to officially book the $6100 in realized premium that the strangles have brought in over the last year or so.
With 111 weeks remaining in the trade and a max loss of 15.20 I’ll only need to sell about 13.5 cents a week to cover the max loss worse case scenario.
Sold GLD DEC 8 2017 123.5 Calls @ .28
PS…yes I could’ve just bought the LEAP calls and sold against them but I like to have the possibility of booking some profit on my hedge and maybe adding to the long position at some point.