Week 819 Gold, Option Write/Hedge (GOWH) Position & Performance Update

Asset Investment Management

2 years ago

Sections in this report
1) Annual performance & spreadsheet weeks 1 through 818
2) Current position week 819
3) Offset positions week 818
4) Basics of how this program trades
5) 2 Jan. 2007 through 2 Sep. 2022 weekly/annual performance on offset positions
6) What I like about this program
7) Video walking you through every trade for 2021
* Previous weeks are published on Barchart
* Set up with Barchart to track trades intra-day

1) Gold-Option-Write-Hedge-trade-by-trade-spreadsheet-weeks-1-through-819

2) Gold Option Write Hedge (GOWH) current position week 819

Sold 2 week 3 $1,740 calls against our long futures position +$6.30
Week 806 & 814 delivered gold, currently long 2 contracts average price $1,825.00
Settle $1,718.30 open trade equity on the underlying position -107.70 = -$21,340
Bought two, week 3 $1,685 puts to hedge risk –$3.30 per ounce
Net premium collected $3.00 per ounce
Should next Friday’s settlement be below $1,675 we’ll write a put credit spread to add to our current long futures positions.

3) Offset positions week 818

Sold 2 week 2 $1730 calls against our long futures position +$6.00
Expired worthless +$6.00 per ounce
Week 806 & 814 delivered gold, currently long 2 contracts average price $1,825.00
Bought two, week 2 $1,685 puts to hedge risk –$3.30 per ounce
Expired worthless =-$3.30 per ounce
Net premium collected $2.70 per ounce
Net gain on offset positions after all spreads and commission =+384.00
Should next Friday’s settlement be below $1,675 we’ll write a put credit spread to add to our current long futures positions.

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-819
Performance 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), again to sell it higher (call write offset)
- Total weeks 819, (738 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
- Biggest downfall is weathering large open trade losses on the underlying futures positions