Trade Details & Summary

GDX Strangle (LIVE Closing Trade)

Once again bought back our set of 3 strangles in GDX for a $153 profit 24 days before expiration.


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In this video, I want to go through closing trades near expiration for our GDX position. Today, gold is down almost 6.5% which is very good to see because we've got a lot of positions remaining in gold. We've been real, really good at trading gold.

In fact, we posted a lot of the live entries, exits, adjustments, the entire thing right here on the website and publicly on YouTube. And now, we’re getting to May expiration and trying to close out of a big chunk of our gold position as gold falls today into an expected range.

When I go to our trade tab here, you can see our position in gold is scattered because we had a lot of contracts, we made some adjustments. But right now, we’re looking about $355 on the day, about $501 on the overall position since we opened just the remaining contracts here.

It doesn't even include the things that we’ve already closed out of. And what I want to focus on is the fact that we have a couple of different months here that we’re trading. Namely, we’re trading some June positions which have about 30 days to go here.

Those positions in most cases are doing okay like the June strangle. We might close this one out. This particular strangle is not yet at our profit target but has a lot more time left. But what I want to focus on here today are the other positions which just have about two days to go.

These are our remaining GDX positions for the May contracts. And you can see there’s puts and calls all over the place, scattered single contracts that we've either legged into or adjusted into. And when we go to us analyze tab here, we’re looking at our GDX positions just for May.

I've toggled off the June position. We’re just looking at May. And right now, GDX is sitting right between our breakeven points. It’s sitting exactly where we need it to be for all contracts to expire worthless.

But the problem that comes with trading so close to expiration is that with a move like 6% today in GDX and only two days to go until expiration, who's to say that it doesn’t move another 6% and continue to move lower or rebound 6% or 7% higher and make a big move higher?

We’re going to take what the market gives us today and close out our position. We’re leaving a little bit of money on the table, maybe $75 to $100 or so. But as they always say, a bird in the hand is worth two in the bush. Here’s the thing. You can close out these orders in single legs if you want to.

That's an easy way to go. It's probably really fast to fill in most cases. You don’t necessarily have to do it all the time, but it's very easy to do. We can be a little bit subjective in which ones we close out of first here. In the case of our 26 short calls, given that the stock is trading around 24 and falling hard, we can probably leave the 26 short calls to be closed maybe last of this series.

As you work through there, just think about that as far as what positions you want to close out of. We have the 23 puts which the market is moving now down against, so these are probably going to be the first set that we close out of. We’re still winning on these individual puts.

We sold them for 32; they’re not worth 12, so we’re winning on that side. But as market moves down from 23.88 and continues to move lower, probably focus on these 23 puts as the first series. Here’s another set of the 23 puts.

Our 25 calls here which are above the market probably want to focus on those second to the last with the 26 calls. Everything the market is moving towards, meaning our 23 puts for May, we’re going to go ahead and try to focus on closing out of those first.

If we open up the May contracts and us just, go to our… You can change and see positions that you have different ways. You know we’ve got six of the 23 puts here for May, so we’re going to go ahead and try to close those out as well as the 25 and 26 calls above the market, all in one full swoop here today just to get everything off.

Now, one of the things you can do is close them out in stages so that you could close out just the 23 puts individually and then close out of the upper ends as well, or you can choose to close them out in two different orders. What we’re going to do is we’re going to close them out in two different strangle orders.

We’re going to buy sets of three back at a time. In this case, we’re going to buy three of the 25 calls back, and we’re also going to buy three of the 23 puts back. That will give us a set of strangles that we’re buying back. And we’re going to go ahead here and buy these back.

This is our strangle, and we’re just going to do them in sets of three, so this will knock it down to the three, this will basically take the 25s off, then we’ll come in and do another set of that strangles here, and we’re just going to try to fill here at the market price.

We’ll do a set of three. That should fill pretty quickly in the market and get us out of there. And then we’ll do another set of three, and we’ll just make that order right behind it, so we’ll go ahead and buy three of the 26 calls back (they should be worth about $3 apiece, $4 respectively) and then buy three more of the 23 puts back.

We’re just spreading out the order here a little bit just to make it all clean and nice and easy to get these trades in. You can do it individually if you want to, you can spread the orders out, it doesn’t matter.

But at the end of the day, you just want to close out of all these positions. Right now, it’s about 3:17, 3:18 in the afternoon. We’ve got both of these working orders placed, so we’ll pause this video and come back once we get filled here or if we need to make an adjustment.

Alright, it’s been about 10 minutes or so, and we’re going to come back in here and try to adjust our pricing a little bit. The first one that we’re going to start with… And we’re going to do it slowly. We’re going to offer 21 here which is the new price on one of the sets of strangles that we’re trying to get out of here in GDX.

And in the case of the other one, the markets have 15; we’re offering 16. We’re going to try to offer just a penny higher in that. We’re going to pay two pennies over the market price here and try to get out of these.

At least with the market right now, because we’re getting closer to the end of the day and you can see one of the orders did get filled here and got filled at 16 which is ironic. It did get loaded at 16 which is good, and we’re just going to try to get out of these before the end of the day.

We’ve got about 30 minutes to go until the end of the day, so apparently getting out of these and taking money off the table is more important than a penny or two in a trade. Let’s try to adjust here in GDX one more time given that the other position filled pretty quickly. There we go.

And you can see the position filled automatically here at 22, so now we’re out of our entire GDX position and still have a nice little profit going. The remaining positions that you can see for the June contracts now…

We only have two strangles in June; we’ll try to look to add some more, but we’ve already got about $200 baked into these June positions for next month. As always, I hope you guys enjoy these videos. If you have any comments or questions, please ask them in the comment section right below. And until next time, happy trading!

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