Trade Alert – (GLD) May 16, 2025 – EXPIRATION AT MAX PROFIT

When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.

 

Trade Alert – (GLD) – EXPIRATION AT MAX PROFIT

EXPIRATION of the SPDR Gold Shares (GLD) May 2025 $275-$285 vertical BULL CALL debit spread at $10.00

 

Closing Trade

5-16-2025

expiration date: May 16, 2025

Portfolio weighting: 10%

Number of Contracts = 12 contracts

Just to be clear, this position does not expire until 4:15 PM today, Friday, May 16.

Like all successful trades, this one looks stupidly cautious with 20:20 hindsight and (GLD) trading at $297.04. That puts it at 3.14% above the nearest $285 strike price.

As a result, you get to take home $1,440 or 13.64% in 17 trading days.  Well done, and on to the next trade.

You don’t have to do anything with this expiration.

Your broker will automatically use your long position to cover your short position, canceling out the total holdings.

The entire profit will be credited to your account on Monday morning, May 19, and the margin freed up.

Some firms charge you a modest $10 or $15 fee for performing this service.

The flight of money right now is from small, undercapitalized, and questionable to large, overcapitalized, and rock-solid balance sheets.

The bull case for gold is simple. Falling interest rates mean less yield competition for gold, which yields nothing. China and Russia have been stockpiling gold for years to avoid international financial sanctions. The only way the Chinese can save right now is to buy gold.

A global gold shortage is developing, with new mine costs rising. Gold also offers protection against rising US debt, which is expected to hit $35 trillion shortly.

On top of all this, Chinese speculators have shifted their principal savings vehicle from real estate, which has crashed and has no future, to gold. This adds a large retail element that has never existed before.

SPDR Gold Shares (GLD) is a play on physical gold. They are shares in a corporation that owns 400-ounce gold bullion bars held by a London trust. It is far safer owning gold through the (GLD) than owning your own physical gold bars via a third-party custodian. If the custodian goes under, which is frequent, your gold is gone. With (GLD), your credit risk is with State Street, a highly rated firm with a strong balance sheet.

For details about SPDR Gold Shares (GLD), please visit their website at https://www.spdrgoldshares.com.

This was a bet that the (GLD) would not fall below $285 by the May 16 option expiration in 17 trading days.

Here are the specific trades you need to close out this position:

EXPIRATION of 12 May 2025 (GLD) $275 calls at………….………$19.04

EXPIRATION of short 12 May 2025 (GLD) $285 calls at…….……$9.04

Net Proceeds:………………………….………..………………….………….$10.00

Profit: $10.00 – $8.80 = $1.20

(12 X 100 X $1.20) = $1,440 or 13.64% in 17 trading days.