Posted on July 28, 2020
We’re coming at you early this week because the holy and downcast convocation we know as Tisha B’Av falls on Thursday.
Jews and Noahides know this as the saddest day of the Jewish calendar – may it be the last of its kind.
And may we all be redeemed speedily in our days.
We’ll be offline from the evening of Wednesday, 29 August through Thursday the 30th.
Feel free to contact us before or after those hours with questions or concerns.
And may a reinstituted sacrificial service become a reality this year!
We’re actually returning to a former trade – one that paid off wonderfully for us in just the last month and that we believe now offers additional benefits – if we play our cards right.
The first iteration of our WPM/GLD meisterburger was launched in Two Way Straddle in the Precious Metals – A New Angle, and all the closing details for the trade can be found HERE.
We netted a 4560% gain on that one, and since then the precious metals have surged.
It’s our contention that we can double the results of our first effort by reinstating the trade today with slight modifications.
But before we get there, have a look at the two securities charted against one another year-to-date –
As you can see, WPM is in the habit of outdoing bullion like a slingshot beats a shot-put. And with both stocks pushing well into the ether, we could well see a devastating ricochet akin to Al Unser Jr.’s 1974 Indy crash, that sent axle grease more than 800 yards beyond the speedway.
With the assumption that WPM will continue to swing like a royal simian around her more cantaloupe-colored cousin, we’re writing the following long/short calendar straddle to deliver the goods.
And here are the details –
A Jew and His Gold recommends you consider the purchase of the WPG October 16th 55/60 Strangle for $14.00 (CALL – $6.15; PUT – $7.85) and sell the GLD September 30th 183 Straddle for the same $14.00 (CALL – $6.65; PUT – $7.35). Zero premium is the result.
Rationale: the trade has several advantages.
First, mind the dates – the long WPM options expire 16 days after the short GLDs.
The long WPM is a strangle, meaning both sides are currently in-the-money, increasing the likelihood that both CALL and PUT sides offer a return (as they did with our last WPM/GLD pairing).
Maximum gains and losses are near-impossible to foretell, especially so since it’s a calendar spread.
The worst that could happen is WPM could blow up as a corporate entity – or its executives could get caught in an Antifa rally with the wrong signage.
And while both may be possible, we see little odds of either occurring over the next three months.
In short, it would take a great deal of mismanagement to mess this one up.
Many happy returns,