GLD and XLE Options Trade

Our Options Trade of the Week usually has one focus but given the big moves in both gold and oil, this week we are going to take advantage of the moves they have made.

Here is how it breaks down:

GLD (Gold)

A large move to the downside makes us consider we are looking at a near term oversold condition.  Since trading Options opens us up to more trading opportunities than Futures trading, we are going to look to profit from a sidways consolidation or a bounce higher.

For that, we will be selling a put spread on the Gold ETF – GLD

XLE (Oil)

There has been a spike in oil prices over the last month and that spike has us considering an overbought condition in the near term.  We want to take advantage of that condition and potentially profit from either a consolidation or a move lower in price.

To do that, we are selling a call spread on the energy ETF – XLE

Options Trading Video

In the video below, I will walk through our thought process in selecting these two trade and also piece them together from start to finish.

Next week we will recap our open trades and also look to add a new trade of the week.  If you watch the video and have any questions, please feel comfortable reaching out to me at mike@netpicks.com