Call Spread on GLD on 4/15/2013

GLD, The investment seeks to replicate the performance, net of expenses, of the price of gold bullion. The trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets. The gold held by the trust will only be sold on an as-needed basis to pay trust expenses, in the event the trust terminates and liquidates its assets, or as otherwise required by law or regulation.

Stockwinners is bullish on this name for the follwing reasons:

1. The volatility of GLD options have increased by more than 130% since Friday and that level of volatility is not sustainable. 
2. GLD suffered its worst two-day selling spree in 30 years and has declined by more than 9% . The move is overextended and we like to take the other side of the trade.
3. GLD will benefit from any market correction which is highly possible in May.
4. The risk/reward ratio is really attractive in this high volatility environment.

Trade: Buy 1 June 140/145 Call spread for less than 1.20

Trade Buy 1 June $140.00 Call at $2.62 Sell 1 June $145.00 Call at $1.42 For a net debit of $1.20 Profit/Loss Analysis Breakeven at $141.20 Maximum profit is $380.00 at strike of $145.00 Maximum loss is ($120.00) at strike of $140.00 Closing Summary Sold 1 June $140.00 Call at $5.35 Bought 1 June $145.00 Call at $2.75

Position closed on 4/25/2013 at price of $2.60 with a 116.67% gain in 10 days.

Updates

4/25/2013 2:10:12 PM

We are closing our position and taking profits on this trade If you still want to stray long, Be sure to adjust your stop loss and lock in some gains.

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