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« Gold Speculation Vehicles: Gold Stocks Versus Options | Main | Good News For The Uranium Sector »

SK Option Trader Subscribers Bank another Winning Trade with a 37.75% Annualized Return

On the 20th of January 2012 we sent a signal to subscribers recommending the following trade:

“We hereby signal to sell GLD Dec 22 '12 $155/$150 vertical put spreads at [a net credit of] $2.00 with 10% of our capital allocated to this trade.

We recently closed the trade at $1.39 for a profit of 20.33% or 37.75% on an annualized basis.

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For those unfamiliar with how this trade worked and what it meant, at the time we explained it in detail to our subscribers:

In this trade we are selling the $155 puts and buying the $150 puts at the same time, resulting in a net credit of $2.00 (since the $155 puts trade at a higher price than the $150 puts).

We buy/sell an equal number of options in both legs.

The trade will be profitable should GLD trade higher than $155 and the longer it remains there the more profitable it will be.”

We placed this trade on the following belief, which we communicated to subscribers in January 2012.

“Technically we think that gold needs to close above $1630 to spark a rally higher... …We are confident that the lows of this correction have been made though, and talk of sub $1500 gold prices is overly bearish.”

Looking back on these comments we were spot on. Despite many commentators being very bearish on gold we though the downside was limited and the yellow metal was set to remain range bound. Since we were correct in our view our subscribers were able to bank a tidy 20.33% profit.

Those that follow the gold market will be aware of gold’s key resistance at $1630 over the summer months.

The break through at $1630 was the catalyst that sent gold past $1670 in the past 10 days.

We predicted this rally in a timely manner in our update at the end of July, the chart below is taken from that subscriber update:

We discussed how gold was set to break much higher and our subscribers reaped the rewards.

Unlike many gold trading/investment letters we are not perma-bulls. We trade in and out of gold to maximise our profits and can deliver profits to our subscribers whether gold goes up, down or sideways. That is the beauty of options trading and a key advantage you could have  by being a subscriber to SK OptionTrader.

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Our other assessment of support at $1500 was also on the money. Gold hasn’t breached $1525 in 2012, so although it was not dollar accurate like our $1630 resistance prediction, we were within  2%, so not too bad.

Our other comments in early January when we first entered the trade were as follows:


“Fundamentally the picture does remain a tad uncertain for gold in the short term, hence our expectation of some sideways movement. The drivers for moves significantly higher in gold are changes in market expectations of QE by the Fed and/or ECB. At present the market does expect more easing in Europe, but it is a question of timing. At present we would say that there is less than a 50% chance of QE by the ECB in the first quarter of 2012. Therefore we are going to maintain a less aggressive position on gold until we become more confident of the timing of further easing by the Fed or ECB. “

Just recently, comments from Federal Reserve Chairman Ben Bernanke revealed increased willingness by the Fed to prop up the economy with further quantitative easing (money printing), nicknamed QE3. Many Fed members judged that additional monetary stimulus (QE3) would be warranted fairly soon if the economy (more specifically the labor market) fails to improve.

This was the signal the market needed and helped push gold out of its tight summer trading range of $1550-$1630. Just as we predicted in January, the Fed was the driver of higher gold prices.

There are massive trading opportunities ahead in gold over the next few months.

Sign up to SK OptionTrader to make the most of these opportunities.

In fact, right this moment we have an open trade that is up 69% in 48 days! To see this and our other trading recommendations trades, simply sign up to our service now.

Our average return per trade including losses is 34.96%, with 102 trades closed. Just think, simply by investing $2,000 in one of our trading recommendations you could have paid for your subscription fee in one hit!

We believe September is a big month for gold with possible monetary stimulus by the Fed and ECB.

However many investors will unfortunately miss out of this fantastic opportunity.

Those who sign up to SK OptionTrader will maximise this opportunity as we use options and our trading expertise to outperform the market and some of the other gold investment letters.

Despite gold and markets in general staying relatively flat over summer, we’ve managed to bank several other winning trades recently. Our VXX trade generated a 19.16% return all the while carrying very low risk.

One of the trades we currently have open is up 69% in just 48 days! Subscribe now to see what this trade is and expose yourself to other future trades that could return this and much more!

We must reiterate that there are rare opportunities unfolding in the gold market. If we can generate 69% in a relatively steady market, imagine what we can achieve if and when gold reaches all-time highs.

In fact, you need not imagine. Last year we generated 197.14% in just 24 days on just one trade - also in late summer.

Over the last 10 years, on average gold has risen the same amount in the final 4 months of the year as it has in the first 8. We’re certainly right at the start of the busy season so get on board before the train leaves the station.

As for our trading record to date which you can view here, we have achieved the following:


  • Our model portfolio is up 470.14% since inception
  • An annualized return of 76.35%
  • An average return of 34.96% per trade
  • 102 closed trades, 93 closed at a profit
  • A success rate of 92%
  • An average trade is open for 53.09 days
  • Our model portfolio is up 470.14% since inception


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