Today I've closed for $221 profit my $GLD calendar trades in 28days (on ~$300 risk)
There was management steps: rolling, scale out, so could be useful if you are not familiar with calendar spreads.
Here is my trade journal step by step:
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[ OPENED at 2024-08-19 ]
The current IVR is at 84, while the 62 DTE average IVx is only 19.9, making this IVx level exceptionally high for gold over the past year. On the daily chart, the Gold ETF is trading between the 6/8 and 7/8 levels. The options chain shows that calls 62 DTE are about 130% more expensive, indicating a strong bullish sentiment in the market.
Examining the standard expected move (STD1), even at 4 DTE, the upside target is 237 (7/8), with the downside at 6/8. The delta curve shows the 16 delta OTM call trending upwards toward the 8/8 level, which aligns with the 250 level. Given this, I would caution against buying single-leg calls at such inflated prices. A pullback could dramatically reduce their value, and time decay will work against you. If you're determined to go bullish, a simple CALL butterfly offers a better risk-reward ratio!
The Options Overlay quickly highlights the optimal expiry dates to target: Sep 20-27. I noticed a 4% volatility skew between these dates. The standard expected move (STD1) and delta16 suggest an upward probability range capped at 245, meaning there's an 68% chance that GLD stays below this level by Sep 20.
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[ROLLING DOWN 2024-09-03 at 17DTE ]
The short call delta is now only 6, so I rolled down the calendar and doubled the size. it still looks to me like it is breaking to the next level and has a positive call skew. The breakeven is lower.
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[ [SCALE OUT] 2024-09-12 at 8DTE ]
Break out, position in green. I've scaled out the 50% to fix profit.
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[CLOSE] Today 2024-09-17 at 4DTE
$252 full profit grabbed, I don't wait anymore.
My $GLD Call Calendar open, management and close step-by-step
byu/TanukiTrade inoptions
Posted by TanukiTrade