Message:

<p>[QUOTE=&quot;Merkur, post: 3645309, member: 106019&quot;]Hello all, </p><p>this is my first Post so I will quickly introduce myself:</p><p>I&#039;am a 24 year old Pharmacy student from Germany, just recently getting interested in the numismatic side of &quot;investing&quot; into gold. My Main Topics of Interest are with the Livonian/Teutonic Order aswell as the Dutchy of Courland and the general Hanse area.</p><p>&nbsp;</p><p>So with the recent rise in the gold price i was thinking about selling some gold at 1500$, but was quickly turned away by the spread i had to pay. </p><p>The biggest weakness of investing into physical gold is taking that haircut, atleast when dealing with a regular gold-dealer.</p><p>So I did not sell my gold to a dealer in the End, but did something that pretty much gets better the more Gold one owns.</p><p>Its a option strategy called &quot;covered call&quot;. </p><p>If you use Options to hedge your Gold, pls let me now, but it does not seem to be a big thing, so I&#039;am trying to raise some awareness.</p><p><br /></p><p>A small example:</p><p>I own 10 ounces of gold.</p><p>I want to take profit on it, because the gold price is quite high, but still I&#039;am long term believer in Gold and I like my gold and don&#039;t want to loose 200€ total spread to my dealer.</p><p><br /></p><p>Here is what I do (real example):</p><p><br /></p><p>I sell a Call (Promise to buy x-Amount of Gold for y-Price and z-Time-Frame from me)</p><p>x= 10 ounces</p><p>y= 1500$</p><p>z= 41 days</p><p><br /></p><p>For this service I provide, I get paid some money (I completely limit my up-side on my Gold, and grant all possible profits on that gold towards the buyer of said call, that has to be worth something)</p><p><br /></p><p>The sold Call will net me 330$ right now (real example).</p><p>This I can keep, or buy more gold.</p><p><br /></p><p>Note: In order to sell options you need to have colateral in your trading/options account which in this example mounts up to: 2850$ with my option broker</p><p><br /></p><p>So what happens after 41 days?</p><p><br /></p><p>1.The Price of Gold stays the same: -&gt; I make 330$</p><p>2.The Price drops to 1400$: -&gt; I loose 1000$ on my Gold I own and get 330$</p><p>3.The Price rises to 1600$: -&gt; My Option-Account will show me now -670$, but my gold I own is now worth 1000$ more: means I make 330$</p><p><br /></p><p>I will keep my Gold and I will be able to win something no matter what happens.</p><p>If I sell my Gold I loose like 200$ spread to a dealer and have no gold left, hoping for lower prices. But who knows where the market goes <img src="styles/default/xenforo/clear.png" class="mceSmilieSprite mceSmilie8" alt=":D" unselectable="on" unselectable="on" /></p><p><br /></p><p>This can also be applied to silver or any other commodity.</p><p><br /></p><p>It&#039;s a strategy that does not make sense under 10 ounces of gold, which is the minimal contract size (atleast if selling a Call on GLD ETF).</p><p>If you want to sell Options on Futures , one of those contracts would have the size of 100ounces (quite alot).</p><p>By adjusting the time frame and the strike price of the call one can further get towars a perfect solution based on once opinion on the market.</p><p><br /></p><p>To make it short, you can get some productivity out of the gold you own.</p><p><br /></p><p>What do you think, would that be a valuable strategy for you, or are you using it already?[/QUOTE]</p><p><br /></p>

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in