The Gold "Collar" Strategy

View a recent Gold "Collar" Strategy

 Four (4) reasons why you should consider this strategy...

1) Provides individual traders with a significant "edge".
The edge we are referring to is the "positive skew" in Gold options, meaning there is higher volatility in higher strike prices. (small traders willing to pay more for cheaper OTM calls) Also, the call options we want to sell are relatively more expensive than the put options equally distant from the actual futures price. This is very favorable for selling a call to finance a put purchase. Another very significant "trading edge".

2) Reduces the chances of premature "stop-out syndrome". Ever been stopped out of a trade just before it took off in your favor? Does it seem like the pros know exactly where all the stops are? This strategy uses a put option for protection rather than a stop-loss order. The result is much more staying power to withstand the whipsaw reversal days that can wipe out futures stops.

3) Risk to reward ratio is very favorable. Profit potential is approximately 3 times the maximum risk per position. Larger accounts can add and buildup multiple positions on each pullback.

4) Flexibility. This position can be modified and adjusted to suit different market outlooks and various account sizes. It is also possible to utilize the 100% electronic mini and full size Gold contracts offered by the eCBOT as volume in those contracts begins to increase more and more.

View a recent Gold "Collar" Strategy

Click here to view more Gold strategies

Links to other information on Gold

View a long term Gold chart by Moore Research

eCBOT Gold quotes charts and reports

CBOT Metals

CBOT Gold Info (pdf file)

Contact us for more information.