Week 816 Gold, Option Write/Hedge (GOWH) Position & Performance Update

Sections in this report
1) Annual performance & spreadsheet weeks 1 through 816
2) Current position week 816
3) Offset positions week 815
4) Basics of how this program trades
5) 2 January 2007 through 19 August 2022 weekly/annual performance on offset positions
6) What I like about this program
7) Video walking you through every trade for 2021

1) Gold Option Write Hedge trade-by-trade spreadsheet weeks 1 through 816

2) Gold Option Write Hedge (GOWH) current position week 816

Sold 2 1760 week 4 calls against our long futures position +$9.00 = +$900 per contract
Week 806 & 814 delivered gold, currently long 2 contracts average price $1,825
Open trade equity -$72.00 per ounce -$7.200 per contract = -$14,400
Bought 2 $1,730 week 4 puts to hedge risk paying $6.30 per ounce = -$630 per contract

3) Offset positions week 815

Trade 1
Sold 1 $1,830 week 3 call against our long +$4.10 per ounce = +$410 per contract
The 1830 short call expired worthless +$4.10 per ounce = +$410 per contract
Week 806 delivered gold at $1865
The $1865 long gold position was maintained, settle $1853.00 open trade -112.00 per ounce
Bought 1 $1,780 week 3 put paying $4.00 per ounce = -$400 per contract
Offset the 1,780 put at $27.00 +23.00 per ounce = $2,300 per position
Offset P&L for trade 1 week 815 = $27,10 per ounce =$2,710.00 per position

Trade 2
Sold 1 $1,785 week 3 put collecting 13.40 per ounce = $1,340 per contract
The $1,785 close in the money delivering us a gold position at $1785.00
We kept the 13.40 per ounce premium +13.40 = $1340.00 per position
Bought 1 $1,755 week 3 put paying 3.90 per ounce =+390 per contact
This position was offset at $2.00 – 1.90 per ounce = -$190.00
Offset P&L for trade 2 week 815 = $11,50 per ounce =$2,710.00 per position

Net collected on offset positions week 815, $36.65 per ounce = +$3,665 per unit

4) Basics of how this program trades

From neutral we write a slightly out of the money put option weekly collecting time premium, using a percentage of the collected premium buy a deeper out of the money put to define risk, (put credit spread) this procedure is repeated until we’re delivered a long futures position at a lower price.

Once delivered a long position we write a slightly out of the money call weekly collecting time premium, using a percentage of the call premium collected we buy an out of the money put to define risk, (collar) this procedure is repeated until the long futures position is called away at a higher price.

5) Gold Option Write Hedge trade-by-trade spreadsheet weeks 1 through 816
xxPerformance on liquidated positions

Risk Disclosure

6) What I like about this program

- It collects weekly option income
- Risk is objectively defined on every trade
- You get paid to buy gold lower (put write entry), paid again to sell it higher (call write offset)
- Total weeks 815, 735 up weeks, 80 down weeks (on offset positions)
- Trading methodology is fully disclosed enabling performance verification.
- Very easy track, it trades once a week on Friday’s settlement