The trend-following funds are already as short of gold as they get, the central banks keep buying, and a softer dollar is the catalyst. That is the bounce this week's trade is built on: a call debit spread on GLD, the gold fund, into January.
The chart is not pretty. The pullback went through the 62 percent retrace, and a move that deep often double-bottoms first, so the stop sits below those lows. The spread buys the 400 call and sells the 430 call, 90 days of time, because a directional trade needs room.
Two days in, the position is down 1.2 percent, a nothing burger. The exit rules: out at a loss of 65 percent of the debit, about 361 in GLD, and the upside near 422 pays 167 percent. Lose 65, win 167.
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Education only. Nothing here is investment advice. Options carry risk, including the loss of the whole stake.