Blog is on the move

Moving to www.chartemporium.com

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Follow-up: Gold and Silver - oversold but where are the bulls?

Well the bulls finally came out and after a 4% rally and 1.5 point increase in implied volatility - it is probably time to take some off the table. I'm selling my GLD Jan 160 calls @ 1.3 after it rallied from 28c. I still think gold can rally, but don't mind taking a profit (Original purchase @ $1, doubled down at 70c, and unfortunately missed the 28c print).



Old Post
http://chartemporium.blogspot.com/2011/12/gold.html

Political Risk (Iran) and the Volatility in Crude

Crude volatility is picking up again as political tension between Iran / the US is on the rise. Link

Short dated USO call spreads would allow you to position for increased volatility in crude while limiting your loss if the situation is resolved (which hopefully it is). Volatility is relatively cheap for what could be the beginning of a 100% rally in crude (see chart of crude during the Gulf War below).



Chart of WTI Crude from 1/1/89 to 12/31/92 (Yes that is a 100%+ rally)


Payout of being long the USO Jan 42/48 call spread at 36c (was trading for 25c this AM).