<a target='_blank' title='ImageShack - Image And Video Hosting' href='http://imageshack.us/photo/my-images/3/glddistro.png/'><img src='http://img3.imageshack.us/img3/1836/glddistro.png' border='0'/></a><br>Uploaded with <a target='_blank' href='http://imageshack.us'>ImageShack.us</a> <a target='_blank' title='ImageShack - Image And Video Hosting' href='http://imageshack.us/photo/my-images/814/gldprobband.png/'><img src='http://img814.imageshack.us/img814/5779/gldprobband.png' border='0'/></a><br>Uploaded with <a target='_blank' href='http://imageshack.us'>ImageShack.us</a>
well if you have a trajectory even like in your head for what 15 or 30 days out considering previous ralleys look like.. i just posted some distros based on historic volatility.. 170 is on the edge of a 2nd stardard devation move.. i would bet a slightly more modest bet is better.. and just take the trade off the table with profit if it starts moving up towards 170.. ...
So the probability of the price being above the Red Line (1 Standard Deviation), at about 170, in 30 days is 100.00-68.269 = 31.731%? So a 1 out of 3 chance of making 170 in 30 days?
look at this ratio i constructed... totally perfect for a blow up to the upside.. with limited risk.. i went out to just 10 days to expire.. and you can close the trade without really getting into any max loss territory.. .. so i model it so that you have a month for the thing to go up and if it doesn't you trade out no big deal.. <a target='_blank' title='ImageShack - Image And Video Hosting' href='http://imageshack.us/photo/my-images/842/gldbackspreadwithnotes.jpg/'><img src='http://img842.imageshack.us/img842/4678/gldbackspreadwithnotes.jpg' border='0'/></a><br>Uploaded with <a target='_blank' href='http://imageshack.us'>ImageShack.us</a>
now this is with only six days till expiration.. you take your loss if you have one right here.. anywhere pass this if your sitting around the 175 area your really gonna get hurt.. no you figure if you only do 1 short 173 and 5 long 176 its only gonna cost ya like 160 bucks to put on.. most you can lose is the difference between the strikes.. and if you get a good spike up and the volatility goes up and your at like 170 in ten days your a big winner.. even so i love these kinda trades. <a target='_blank' title='ImageShack - Image And Video Hosting' href='http://imageshack.us/photo/my-images/341/gldbackspread6daystillo.png/'><img src='http://img341.imageshack.us/img341/6596/gldbackspread6daystillo.png' border='0'/></a><br>Uploaded with <a target='_blank' href='http://imageshack.us'>ImageShack.us</a>
2/3rds of all the price action based upon historical volatility will be within one standard deviation.. yes 68% thats just math to consider.... i think your macro Gold trade isn't a bad idea.. all you need is a good run to the upside with a backspread on.. and your in big profit.. backspreads are great in certain respects.. if you get a spike up... or a couple days of strong moves up.. right when it slows or stops sell!
Thanks for all these ideas. I'll need some time to study them, plus the stuff I downloaded yesterday, but will be giving Butterfly Spreads and Backspreads a try for sure. Will keep you posted.
$DXY is up a bit and SLV hasn't fallen back. Very solid. Added-on to my SLV position with a November 30.5 Call.
yeah.. its worth getting familiar with.. i think i'm actually gonna try one of these trades or a combination of a fly and a ratio backspread.. butterfly in sept and a ratio in oct..