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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Nymex Gold Futures and Options Trading

Commodities / Gold and Silver 2010 Feb 01, 2010 - 01:47 AM GMT

By: Patrice_V_Johnson

Commodities

Best Financial Markets Analysis ArticleThe J.E.D.I. Way will received a fill of $4.70 on its purchase order of the following put option on Nymex Gold on Monday, January 25, 2010:

(1) 1 - Nymex Gold April 2010 950 Put Option (Ticker Symbol: GCJ1950P)


Below is The J.E.D.I. Way’s "SET-UP CRITERIA" and "ENTRY-ALERT" for the above listed option on the April 2010 Nymex Gold:

SETUP: BREAKOUT BELOW 50 DAY MOVING AVERAGE

Buy Put Options on the April 2010 Nymex Gold Options (GC) when the following conditions have been satisified:

(1) Prices on April 2010 Nymex Gold Futures (GCJ1, GCM1, and GCQ1) trades below their 50-Day Moving Average.

CHART 1:


INITIAL COST FOR FIRST PUT OPTION/ESTIMATED COST FOR SECOND PUT OPTION:
($470.00) / (390.00)

ESTIMATED BREAKEVEN (w/$20.00 commissions per round turn):
$490.00 (or 4.90) for the April 2010 Nymex Gold 950 Put Option No. 1
$420.00 (or 4.20) for the April 2010 Nymex Gold 950 Put Opton No. 2

ESTIMATED UPSIDE TARGET FOR 2010 NYMEX GOLD FUTURES: $1700/oz

ESTIMATED DOWNSIDE TARGET FOR 2010 NYMEX GOLD FUTURES: $1000/oz
MAX GAIN FOR DOING THESE TRADES: Unlimited
MAX LOSS FOR DOING THESE TRADES: $490.00 for first option $420.00 for second option

PROTECTIVE STOPS FOR THE PUT OPTIONS:
None for the April 2010 Nymex Gold 950 Put No. 1
None for the April 2010 Nymex Gold 950 Put No. 2

EXITS:
The J.E.D.I. Way will exit the April 2010 Nymex Gold 950 Put Option No. 1 at breakeven or better, otherwise take a loss of $490.00 for this options contract.
The J.E.D.I. Way will exit the April 2010 Nymex Gold 950 Put Option No. 2 at breakeven or better, otherwise take a loss of $420.00 for this options contract.

EXPIRATIONS:
The April 2010 Options on the Nymex Gold expire on March 25, 2010.

CONTRACT SPECIFICATIONS FOR NYMEX GOLD FUTURES OPTIONS:
Price Value of Option Point:$100

CONTRACT SPECIFICATIONS FOR NYMEX GOLD FUTURES:
Contract Specifications:GC,COMEX Trading Unit: 100 troy ounces
Tick Size: $.10/oz. = $10.00
Quoted Units: US $ per troy ounce
Initial Margin: $4,300 Maint Margin: $3,250
Contract Months: All 12 months.
First Notice Day: Last business day of month preceding contract month.
Last Trading Day: Third last business day of the month.
Trading Hours: Open outcry trading is conducted from 8:20 A.M. until 1:30 P.M.
Electronic: 3:15 P.M. on Mondays through Thursdays and concluding at 8:00 A.M. the following day.
Sundays, the session begins at 7:00 P.M. All times are New York time.
Daily Limit: $75.00 per ounce

Until next time...

Thanks for listening, and good luck with your trading.

Best Regards,
Patrice V. Johnson

E-mail : Patrice@stockbarometer.com if you have any questions about this trade or any other questions or comments.

If you are interested in continuing to receive our advice as your free trial, please click the following link to subscribe.
http://www.stockbarometer.com/pagesJEDI/learnmore.aspx

Important Disclosure
Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.
Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.
In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.
For a complete understanding of the risks associated with trading, see our Risk Disclosure.

© 2010 Copyright Patrice V. Johnson - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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