Week 821 Gold, Option Write/Hedge (GOWH) Position & Performance Update

Sections in this report
1) Monthly and annual performance & spreadsheet weeks 1 through 820 offset positions
2) Current position week 821
3) Offset positions week 820
4) 2 Jan. 2007 through 23 Sep. 2022 weekly/annual performance on offset positions
5) Basics of how this program trades
6) What I like about this program
7) Video walking you through every trade for 2021
8) About automated trading accounts (ATAs)
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1) Gold-Option Write Hedge trade by trade spreadsheet weeks 1 through 821

2) Gold Option Write Hedge (GOWH) current position week 821
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Sold three week 5 $1,675 calls against our three long futures positions +$7.40 per ounce
Week 806 & 814 delivered gold, long 2 contracts average price $1,825.00
We added to this position 16 September (week 820) buying one October gold at $1,665
We’re now long a total of three contracts average price $1,771.67
Bought three, week 5 $1,600 puts to hedge risk –$2.90 per ounce.
Margin Requirement = current market, $1,641.30 – the put hedge strike, $1,600.00 = $41.30
Total margin requirement $41.30 per ounce X 300 ounces = $12,390
Net premium collected week 821 on all positions, $4.50 per ounce.
Should next Friday’s settlement be below $1,600 we’ll add to our long futures position.
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3) Offset positions week 820
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Sold three week 4 $1,695 calls against our three long futures positions +$8.10 per ounce
These options expired worthless +8.10 per ounce
Week 806 & 814 delivered gold, long 2 contracts average price $1,825.00
We added to this position 16 September (week 820) buying one October gold at $1,665
Long a total of three contracts week 820, average price $1,771.67
Gold’s price at option expiration $1,641.30 per ounce, open trade-$130.37 per ounce
Unable to add to our position at $1,600, we’ll try again this week
Bought three, week 4 $1,650 puts to hedge risk –$8.20 per ounce
These positions were offset +$8.70
Net premium paid week 820, $0.10 per ounce
Net on the week 4 $1,650 hedge +$0.40 per ounce
Total on offset positions week 820 +$8.50 per ounce X 3 = $2,550.00
Net after all spreads and fees = $2,316.00
*Gold has now sold off $445.50 per ounce from it’s 8 March 2022 high of $2,086.80
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4) Gold-Option Write Hedge trade by trade spreadsheet weeks 1 through 821
Performance on liquidated positions

Risk Disclosure

5) 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.

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 820, (740 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.