It is safe to say that last week for SK OptionTrader subscribers was at the very least, a good one. We closed two separate trades that made money due to the falling prices of both silver and gold stocks. We have long been of the belief that these stocks are a big “no-no”, when it comes to investments, if you want to make a profit that is. Therefore we have taken positions that benefit from this consistent underperformance, and have banked gains as a result.
On Wednesday last week we began closing profits for subscribers, as we closed our Short Vertical Call Spread position on GDX. This trade came in at 15.88%, just 1.74% below the maximum potential profit that we would have banked had we held the position for another two and half months. Our recognition that the risk reward dynamics on this trade were no longer in our favour has allowed us to re-allocate the capital to other trading ventures.
The versatile nature of options means that this trade would have made a profit if gold stocks either fell or went sideways over the time period. Gold has failed to rally in the last 6 months, combine this with positive payrolls and the summer doldrums approaching, this particular trade was a solid pick for our portfolio. The incredibly favourable risk reward dynamics paid off much sooner than we had anticipated, and we were rewarded with a solid 15.88% profit.
Our second trade closed last week was a position where we used Puts on the most loved silver stock, Silver Wheaton, to generate a profit of 29.41% in just 17 days. The puts offered us leverage on SLW, SLW offered leverage on silver, and silver, being more volatile, offered leverage on gold. The “Inception” levels of leverage resulted in our position outperforming gold by more than 30%. This position is just one of our short silver positions that have made money this year; we previously banked 212.50% using Hecla Mining Puts.
SK OptionTrader is building another record of wins this year to match our previous performance. Thus far, our portfolio is up 20.33% just on closed trades this year and all of our trades have been winners.
Overall, our portfolio is up 506% with an annualized return of 63.36%. Of the 120 trades closed 86.67% of have been winners; each trade averaging a return of 30.69% in 52.07 days.
Having closed these positions we are looking at how to best allocate the capital now spare in our portfolio. If you want to know what positions we open and when we open them then all you have to do is subscribe via either of the buttons below.
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