Week 828 Gold, Option Write/Hedge (GOWH) Position & Performance Update

Sections in this report
1) Monthly, annual performance spreadsheet for weeks 1 through 826 offset positions
2) Current position week 827
3) Offset positions week 826
4) 2007-2022 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 828

2) Gold Option Write Hedge (GOWH) current position week 828

Because of the volatility in gold we’re trading off the reservation this week
We’ve purchased 8 puts, 3 to hedge our long positions, 5 to benefit from any sharp sell-off
Net premium collected/paid week 828 = -$2.92 per ounce, $9.30 collected, -$12.22 paid out

Sold two $1,800 week 3 calls at $4.65
Long three December 2022 contracts average price $1,779.67
Bought four, $1,730 week 3 puts to hedge risk –$2.755 per ounce.
Bought Four $1,685 week 3 puts -$0.30 per ounce,
Barchart options quotes – CME options quotes

Margin Requirement = current market $1,769.40, – put strike $1,730.00 = $39.40 per ounce
Total margin requirement & maximum risk $39.40 per ounce X 300 ounces = $11,820
Net premium collected/paid week 828 = -$2.92 per ounce $9.30 collected, -$12.22 paid out
Should next Friday’s settlement be below $1,650 we’ll add to our long futures position.
Barchart options quotes – CME options quotes

3) Offset positions week 827

Week 826 gold settled at $1769.40
Strong upward momentum in gold with call premium too low = no write for week 826
Maintained our three long December 2022 contracts average entry price $1,779.67
Gold settled at $1769.40 open trade P&L -$10.27 per ounce X 3 contracts = -$3,081.00
Bought three, $1,640 week 2 puts to hedge risk –$2.80 using a limit order
The three, $1,640 week 2 puts puts expired worthless
Net premium collected/paid week 826 = -$2.80 per ounce X 300 ounces (3 contracts)
Net for the week on offset positions = -$957.00
Barchart options quotes – CME options quotes

4) Gold Option Write Hedge trade-by-trade spreadsheet weeks 1 through 828
__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 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)
- 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.

7) Quotes & Charts