“Armchair Trader Series” Recommendations
- Week Beginning -
Monday, October 29, 2018

by Ian Harvey

IMPORTANT NOTE: This is a recommendation and individual members can use their own discretion as to when to enter or exit!

You may also wish to read Stock Options Made Easy Trading Philosophy


"Trading Capital Management"

Option Trade – SPDR Gold Trust (NYSEARCA: GLD) Calls

Wednesday, October 31, 2018

** OPTION TRADE: Buy the GLD JAN 18 2019 115.000 CALL at approximately $2.60. Place a pre-determined sell at $5.20.

Also include a protective stop loss of $1.00.

Gold is the ultimate legacy asset, and due to its universal acceptance, it offers ideal financial shelter. For those that want the benefits of gold ownership without physically holding it, you have SPDR Gold Trust (NYSEARCA: GLD). The market uncertainty, the volatility experienced and the reaction to the next Fed meeting makes this options trade a safe back-up plan.

GLD overall hasn’t performed to expectations. However, this current timeframe has a different complexion. The most conspicuous factor is the broader markets. After years of consistently strong returns, we’re finally witnessing a genuine correction. Typically, fear in the markets translates to upside for gold as investors seek reliable shelter.

Another tailwind for the GLD is the potential response from the Federal Reserve. A corrective monetary policy would likely boost gold prices, and thus, the GLD.

Also, the trade war with China is going to cause more disruption, helping to produce poor earnings from companies hurt by tariffs and slowing demand.

As well, we’re nearing the most important mid-term elections in a generation which happen to be the same week as the next FOMC meeting.

Investors bought shares of SPDR Gold Shares on weakness during trading on yesterday. $121.28 million flowed into the stock on the tick-up and $85.50 million flowed out of the stock on the tick-down, for a money net flow of $35.78 million into the stock. Of all stocks tracked, SPDR Gold Shares had the 10th highest net in-flow for the day. SPDR Gold Shares traded down ($0.51) for the day and closed at $115.80

About GLD…..

SPDR Gold Trust (the Trust) is an investment trust. The investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion, less the Trust’s expenses. The Trust’s business activity is the investment of gold. The Trust creates and redeems Shares from time to time, but in one or more Baskets (a Basket equals a block of 100,000 Shares).

Institutional investors that have recently made a change to their positions in the stock….
  • Inverness Counsel LLC NY lifted its stake in shares of SPDR Gold Shares by 9.9% in the third quarter. The institutional investor owned 5,935 shares of the exchange traded fund’s stock after buying an additional 536 shares during the quarter. Inverness Counsel LLC NY’s holdings in SPDR Gold Shares were worth $669,000 at the end of the most recent reporting period.
  • South Texas Money Management Ltd. acquired a new stake in shares of SPDR Gold Shares in the 2nd quarter valued at approximately $88,155,000.
  • Cornerstone Wealth Management LLC boosted its stake in shares of SPDR Gold Shares by 12,300.9% in the 2nd quarter. Cornerstone Wealth Management LLC now owns 496,034 shares of the exchange traded fund’s stock valued at $4,223,000 after purchasing an additional 492,034 shares in the last quarter.
  • TD Asset Management Inc. boosted its stake in shares of SPDR Gold Shares by 117.6% in the 2nd quarter. TD Asset Management Inc. now owns 610,077 shares of the exchange traded fund’s stock valued at $72,386,000 after purchasing an additional 329,695 shares in the last quarter.
  • Envestnet Asset Management Inc. boosted its position in SPDR Gold Shares by 161.4% during the 2nd quarter. Envestnet Asset Management Inc. now owns 526,663 shares of the exchange traded fund’s stock worth $62,489,000 after buying an additional 325,206 shares during the period.
  • Finally, Billeaud Capital Management Inc. acquired a new stake in SPDR Gold Shares during the 2nd quarter worth approximately $27,623,000.


Therefore, one popular safe-haven investment for investors concerned about the market is gold (and gold ETFs). Gold is particularly suited as a hedge against currency uncertainty. And, since higher interest rates will directly impact currency levels, gold seems like a good candidate to move higher with rising rate expectations.

GLD traded down $0.53 on Tuesday, reaching $115.78. The company’s stock had a trading volume of 7,150,815 shares, compared to its average volume of 7,224,522. SPDR Gold Shares has a fifty-two week low of $111.06 and a fifty-two week high of $129.51.

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