In VanEck vectors gold miners real-time gleams

Yesterday the price of gold rose after President Donald trump is warning Russia from potential missile strike in Syria. Investors also nabasa gold, driving VanEck vectors gold miners etf (NYSEARCA:GDX) is higher by as much as 3.5% in early morning trading.

Implied volatility is increasing along with precious metals showing a sharp rise in demand for options on GDX and the spdr Gold shares (NYSEARCA:GLD). Whether a knee-jerk jump legs remains to be seen, but it is necessary to re-evaluate the space to see what deals we can build on the profit from any extra “fear spikes” in precious metals.

Gold bugs was in desperate need of a positive catalyst for many years, particularly in gold stocks. At 23$, GDX sits at the same place it was in may 2013. Five years of travel by a circuitous route to nowhere. And it’s not like the shareholders received dividends at the same time. GDX has a paltry dividend yield of 0.8%.

Last year the carousel had seen of the Foundation stuck in the narrow window between 21 $and $25.50. Although there have been numerous attempts, nothing was able to shake GDX out of its stupor. Today jump, and reliable-it’s just a return of the price to the mid range, so we are still far from a breakthrough.

Source: OptionsAnalytix

However, the continued strength of gold could push GDX to the top of its range around $25 in the coming weeks. Here’s a trading idea Bank for this outcome.

Risk reversals GDX

If you’re comfortable, all bets GDX remains above 22 $and I want to bring the kicker up if it ramps higher, we consider this risk reversal trade. To sell Jun 22 $to put in 60 cents and buy two June 25 $calls for 35 cents apiece. The whole transaction may be entered at a net debit of 10 cents.

In fact, we sell a naked put and use the received premium to buy a pair of outside-money calls. The main risk in the position is a short path, so close it if GDX has broken major support at $20.80.

At the time of this writing, Tyler Craig held a bullish options in GLD. Want more education on how to trade? Check out my trading blog, tales from the technician.

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