I’m selling more call premium in GDX today. We’ve reaped most of the call premium from our February 16, 2024, 29 calls so I’m going to buy them back and sell more premium going out to the March expiration.
Gold Miners ETF (GDX)
GDX is currently trading for 27.30.
Here is the trade (we are not selling naked calls; you must own at least 100 shares of GDX before placing the trade):
Buy to Close GDX February 16, 2024, 29 (covered) call for $0.04 (adjust accordingly, prices may vary from time of alert).
Once that occurs:
Sell to Open GDX March 15, 2024, 29 (covered) call for $0.44 (adjust accordingly, prices may vary from time of alert).
Delta of short call: 0.29
Probability of Profit: 73.91%
Probability of Touch: 52.55%
Total net credit: $0.44
Max return (cash-secured): 1.6%
Risk Management
We use GDX as part of our Income Wheel Portfolio, so if GDX closes above our call strike at expiration, our shares will be called away and, in most cases, we will reap the capital benefits of the stock increase, plus the premium acquired. Until that point, we will repeatedly sell calls on GDX.
As always, if you have any questions, please feel free to email me at andy@cabotwealth.com.
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