Posted on November 19, 2020
You gotta forgive us.
We’re raising a dead horse again.
For a fifth time!
Like a Phoenix from the ashes.
Like Trump from the media-consigned loss column.
But without the orange.
It’s our bi-monthly venture back into the Wheaton/GLD realm, where we’ve managed to turn a buck with Swiss-watch regularity for nearly a year now.
Let’s see if we can push our luck just one more time.
So why not go there again?
And so we are…
A Jew and His Gold recommends you sell the GLD December 4th 175.50 straddle for $4.09 (2.04/2.05) and buy the WPM December 18th 42 straddle for $3.97 (1.89/2.08). Total credit on the trade is $0.12.
Rationale: It’s been too good to be true thus far, so we don’t want to count our chickens…
But the set-up is almost too good to be true.
First, because of the price differential in the underlyings, we can buy a WPM straddle for a great deal less than the price of a GLD straddle. So our initial outlay is nil (actually, a credit!).
Additionally, WPM has far more beta than GLD, so price swings in the PMs should offer much richer movements in the long WPM options.
AND best yet, we get two extra weeks on the long side after the GLD straddle expires.
May the holy month of Kislev bring you riches galore!
Many happy returns!