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Jim Strugger's SPDR Gold Trust (ETF) Trade

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Jim Strugger, a derivatives strategist of MKM Holdings, suggested on Bloomberg Markets that investors should consider an options strategy in SPDR Gold Trust (ETF) (NYSE: GLD).

He thinks that it would be a good idea to buy the June 120 call, sell two June 130 calls and buy the June 140 call. The options structure would cost him $1.75 and that is the maximal amount he can lose. The trade breaks even at $121.75 and if SPDR Gold Trust (ETF) jumps to $130, Strugger is going to earn $8.25, which is a maximal profit for the trade. Above $130 the profit starts to trail off and it starts to lose money above $138.25. The strategy offers 5 to 1 payoff at $130.

Posted-In: Bloomberg Markets Jim StruggerAnalyst Color Commodities Options Markets Media

 

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