Week 824 Gold, Option Write/Hedge (GOWH) Position & Performance Update

Sections in this report
1) Monthly, annual performance, spreadsheet for weeks 1 through 823 offset positions
2) Current position week 824
3) Offset positions week 823
4) 2 Jan. 2007 through 14 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 824

2) Gold Option Write Hedge (GOWH) current position week 824

The $1,665 calls settled at $2.30 premium too low to justify the write
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
Bought three, week 3 $1,630 puts to hedge risk –$2.30 per ounce.
Margin Requirement = current market, $1,641.50 – put strike $1,630.00 = $11.50 per ounce
Total margin requirement $11.50 per ounce X 300 ounces = $3,450
Net premium collected/paid week 824 = –$2.30 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 823
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We wrote the $1750.00 week 2 calls collecting $4.20 per ounce
$1750.00 week 2 calls expired worthless
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
Settle $1,641.70 open trade equity on the underlying futures position -137.97 = -$41,391
Bought three, week 2 $1,650 puts to hedge risk –$2.50 per ounce.
These puts were offset at $8.90 we paid $2.50, gain per ounce $6.40
Total on offset collected/paid premium and offset positons $10.60
Net after all bid/ask, brokerage, exchange and regulatory fees = $2,951.10
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4) Gold Option Write Hedge trade-by-trade spreadsheet weeks 1 through 824
__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.