Week 825 Gold, Option Write/Hedge (GOWH) Position & Performance Update

Sections in this report
1) Monthly, annual performance spreadsheet for weeks 1 through 824 offset positions
2) Current position week 825
3) Offset positions week 824
4) 2 Jan. 2007 through 21 October 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)
* Previous weekly updates are linked here
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1) Gold Option Write Hedge trade-by-trade spreadsheet weeks 1 through 825

2) Gold Option Write Hedge (GOWH) current position week 825

Sold three $1,685 week 4 calls at $9.30 (using a limit order)
We’re now long a total of three December 2022 contracts average price $1,779.67
Bought three, week 4 $1,640 puts (using a limit order) to hedge risk –$6.20 per ounce.
Margin Requirement = current market $1,656.30, – put strike $1,640.00 = $16.30 per ounce
Total margin requirement $16.30 per ounce X 300 ounces = $4,890.00
Net premium collected/paid week 824 = $3.10 per ounce.
Should next Friday’s settlement be below $1,625 we’ll add to our long futures position.
Barchart options quotes – CME options quotes

3) Offset positions week 824
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The $1,665 premium too low to justify the write S/B around $7.20 was at $2.30
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 December 2022 contracts average price $1,779.67
Dec 22 Gold settled at $1,656.30 minus -$123.37 per ounce from entry = -$37,011
Bought three, week 3 $1,630 puts to hedge risk –$2.30 per ounce.
Dec 22 Gold settled at $1,656.30 our three week 3 $1,630 put options expired worthless
Net loss on premium paid $2.30 per ounce X 3 contacts = -$807.00 net of all costs
Week 824 loss on all offset positions = -$807.00
Should next Friday’s settlement be below $1,625 we’ll add to our long futures position.
Dec 22 Gold settled at $1,656.30 unable to add to our position
Barchart options quotes – CME options quotes
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4) Gold Option Write Hedge trade-by-trade spreadsheet weeks 1 through 825
__Performance on liquidated positions

Risk Disclosure

Gold Option Write Hedge is a hedge program for people who already own gold or want to own gold long-term and generate income against it using a while defining risk strategy on their underlying gold position. The performance represented is on realized hedge trade profit or loss (offset positions), the open trade equity on underlying position is disclosed in section 2 of this report.

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 821, 741 up weeks, 81 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.