SK Options Trading has recognised the changing market dynamics in the precious metals markets, and as a result we have been consistently banking profits this year. As familiar readers will be aware we have been unafraid to state our view that the bull market may be over, and now we have profited again. This time we used puts on Silver Wheaton to bank a quick 29.41% in 17 days.
We believed that Silver Wheaton would be vulnerable to a price drop, given that it is effectively leveraged to silver, and silver can be more volatile than gold in times of significant movement. As of April 8th, silver is down 4% more than gold, and during the period that we held this trade silver fell 12% more than gold. Therefore we believed Silver Wheaton fall considerably more than gold if the downward trend continued.
To take advantage of this we signalled “to buy the SLW Sep 21 '13 $25 put at $0.85”, to our subscribers.
As the graph above shows, Silver Wheaton rallied as the Cyprus fiasco continued. We believed that the market would simply shrug off the entire event; the equities market continued to rally and gold failed to break its downward trend. With this in mind we continued to hold our position and were rewarded with profits of 29.41% as a deal was reached in Cyprus, and the precious metals markets subsequently fell.
April 5th saw us closing this position, banking our profits and ready to reallocate the increased capital invested. If one had invested just $2000 in this trade, they would have banked enough to more than cover the cost of a 6 month subscription. This means that if one had become an SK Options Trading premium subscriber 3 weeks ago, they could have already paid for their subscription using this trade’s gains alone.
This, the 7th instalment in what is so far a perfect trading year, puts our model portfolio up 20.33% on a YTD basis. Can you say the same for your portfolio?
This winning trade followed a winner of 15.88% that was also closed last week. In that trade we used a vertical put spread on GDX to take advantage of gold’s current downward trend and were rewarded with near maximum profits much sooner than anticipated, allowing us to enter more trades and that could further increase our portfolio.
Since the beginning of our service our model portfolio is up 506.00% 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 this position 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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