GLD has had a nice run this year on the hopes that inflation might come back, that interest rates might rise, and that equities might tank. It’s stalled out over the past couple of days, and dropped yesterday despite the rally in the Chinese market. You might think that could restore demand for gold, but apparently the market thought otherwise. So, is the rally in GLD over? Maybe, maybe not. But last week’s spike higher was accompanied by higher volume, suggesting some short covering. And if that’s gone, it could be a long wait for the gold bugs until all their hopes come to pass. GLD’s IV rank is a paltry 12%, so long debit spreads are more attractive. That’s why, if you’re bearish on GLD, you might consider a long put vertical. The long put vertical that’s short the 125 put and long the 126.5 put in the April weekly expiration with 38 DTE is a bearish strategy with a 60% prob of making 50% of its max profit before expiry and that generates $.06 of positive daily theta.
Opened 19/02/26 for $.83 debit
Closed 19/03/01 for $1.15 credit