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Gold Corrections: Detecting and Taking Advantage of Them With Options

May 16, 2012, 6:22 PM by Przemysław Radomski CFA
gold price correction Gold Corrections: Detecting and Taking Advantage of Them With Options

This essay is a part of the Sunshine Profits Option Calculator knowledge base. Did you know that at times options get cheaper even though they are more likely to bring profits? Indeed, that's true... And making those profits yours is just a matter of buying the right option at the right time. In this essay we will focus on buying call options when the market seems to have bottomed, and buying put options when the market approaches its top thus taking advantage of gold corrections.

Taking into account the size of the 2008 correction in gold and silver, and the top around the $1000 level right before that, we will focus on what could have been achieved if one had bought put options around the top (as a side note, we did). We will use the 2008 top and pre-top action as an example for the whole technique (...).

tops-and-corrections-gold.pdf (1.1 MB)

Dear Sunshine Profits,

gold and silver investors
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