Forum Archive Index - January 2004

["Woody" <solarmax@optusnet.com.au>]

In recent days, April Gold has been in a fairly narrow trading range, between 414.50 and 406.3. A close below 406, which we could see today, should pressure the gold down to at least $397 an ounce, and possibly as low as $388 within a matter of days. This is a 50% Fibonacci retracement from contract highs.

From those levels, I would look for an opportunity to initiate an option strategy. A stradddle would be good here as if gold rallies again it would quickly pay for the Downside Option.

A straddle is the buying of a Call and a Put @ the same strike price, effectivly hedging your self.

 

Woody