JUNIOR GOLD MINERS: The Art Of Gold Digging (+50%)

We Dug Deep And Were Rewarded

Oct 28, 2022

∙ Paid

A golden moment with a last-minute volatility contraction.
Who would have thought gold-digging could be that effortless?
We close the trade with a fifty percent return on equity.

1. Recap Situation

We found out why gold diggers smile, and we couldn’t confirm Mark Twain’s belief that a mine is a hole in the ground with a liar standing next to it. Instead, we only witnessed theta burn, volatility contraction, and faces full of Goldilocks.

We believed a temporary bottom for GDXJ was in, and we have not experienced a lower low throughout the trade.

Check out the original BrainDoζer below.

MacroDoζer

GDXJ: The Art Of Gold Digging

Executive Summary Gold, gold miners, treasury bonds - we dig premium. Find out why gold diggers smile. 1. Why Do I Care Right Now? Forward-looking indicators on inflation are showing signs of cooling. As a result, voices about US treasury bonds becoming an investment opportunity are getting louder. To a certain extent, Gold (GLD) and gold miners (GDXJ) are correlated to interest rates and treasury bonds (TLT). We believe a temporary bottom could be in and bet on a rangebound sideways move from here…

a year ago · Juri von Randow

2. Why Now?

The price of the junior gold miners went sideways as anticipated, and implied volatility contracted over the last couple of days, with earnings releases as the most significant contributor.

We also like to close trades around twenty days before maturity to minimize last-minute gamma risks. Happy end.

Keep reading with a 7-day free trial

Subscribe to MacroDoζer to keep reading this post and get 7 days of free access to the full post archives.