SLV and GLD adjustments

There must be a lot of questions about the direction of gold and silver.

I firmly believe that gold is just in the phase of a correction. It may last for one week or even 1 month ( most probably ).

But the bubble is just at the beginning. ( see diagram above ) I expect a bigger move next year.

So meanwhile, I am just selling calls for all my long positions. I have not added any puts. But I will add protective puts once gold falls below my rising channels.

Meanwhile, I made two adjustments to my ratio spreads:

I sold back my SLV backspread call ratio for .38 losing $170 for 10 contracts. There is no point keeping this trade as it will require substantial movements up to make money. Time decay will eat up most of my gains in the coming weeks. If SLV collapses, I will make some money. But this is an unlikely scenario. Most likely scenario is that SLV will stay between 17 and 20 in the next 6 weeks. So, it is better to get out with a small loss.

I also made adjustment to GLD call backspread. It should work well as GLD goes up. I sold another 5 calls at 110 to reduce my cost. This will bring my risk profile to diagram above. I like the profile. If GLD goes down, I make some money. If it goes up above 112 ( not too much), I will also make money as long as it does not take its time to go up. If it goes up a lot, I will make a lot of money.

I am keeping my broken butterfly trade. It is slightly under water but time decay will compensate and I believe I will end with a profit for this trade.