Entry Alert - Re: NYMEX Gold (GC)

By: Patrice Johnson | Mon, Jan 11, 2010
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1/10/2010 8:43:36 PM

Welcome to The J.E.D.I. Way.

The J.E.D.I. Way will be buying the following call options on Nymex Gold at the Market:
(1) 1 - Nymex Gold April 2010 1700 Call Option (Ticker Symbol: GCJ11700C)
(2) 1 - Nymex Gold June 2010 1700 Call Option (Ticker Symbol: GCM11700C)
(3) 1 - Nymex Gold August 2010 1700 Call Option (Ticker Symbol: GCQ11700C)

The J.E.D.I. Way will also be selling the following put options on Nymex Gold at the Market:
(1) 1 - Nymex Gold August 2010 950 Put Option (Ticker Symbol: GCQ1950P)
(2) 1 - Nymex Gold August 2010 1000 Put Option (Ticker Symbol: GCQ11000P)

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

SETUP: HEAD AND SHOULDERS PATTERN

Buy Call Options on the April 2010, June 2010, and August 2010 Nymex Gold Options (GC) when the following conditions have been satisified:

(1) The 50 Day Moving Average is trading above its 200 Day Moving Average on the WEEKLY CHARTS for the April 2010, June 2010, and August 2010 Nymex Gold Futures (GCJ1, GCM1, and GCQ1) contracts.

(2) Prices on April 2010, June 2010, and August 2010 Nymex Gold Futures (GCJ1, GCM1, and GCQ1) trades above both their 50-Day Moving Average and their 200 Day Moving Average.

(3) Prices on the April 2010, June 2010, and August 2010 Nymex Gold Futures (GCJ1, GCM1, and GCQ1) close above 1050 and trades above this price level for at least three consecutive weeks.

CHART 2:

ESTIMATED COST:

$2580.00 credit

ESTIMATED BREAKEVEN (w/$20.00 commissions per round turn):

$60.00 (or 0.60) for the April 2010 Nymex Gold 1700 Call Option
$190.00 (or 1.90) for the June 2010 Nymex Gold 1700 Call Option
$610.00 (or 6.10) for the August 2010 Nymex Gold 1700 Call Option
936.50 for the August 2010 Nymex Gold 950 Put Option and
976.10 for the August 2010 Nymex Gold 1000 Put Option

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: Unlimited
PROTECTIVE STOPS FOR THE CALL OPTIONS:
None for the April 2010 Nymex Gold 1700 Call
None for the June 2010 Nymex Gold 1700 Call
2.95 for the August 2010 Nymex Gold 1700 Call

PROTECTIVE STOPS FOR THE PUT OPTIONS:

The J.E.D.I. Way will cover the August 2010 Nymex Gold 950 Put when Nymex Gold Futures (Ticker Symbol: GCM1) trades at 950.00

The J.E.D.I. Way will cover the August 2010 Nymex Gold 1000 Put when Nymex Gold Futures (Ticker Symbol: GCQ1) trades at 1000.00

EXITS:

The J.E.D.I. Way will exit the April 2010 Nymex Gold 1700 Call Option at breakeven or better, otherwise take a loss of $60.00 for this options contract.

The J.E.D.I. Way will exit the June 2010 Nymex Gold 1700 Call Option at breakeven or better, othewise take a loss of $190.00 for this options contract.

The J.E.D.I. Way will exit the August 2010 Nymex Gold 1700 Call Option at breakeven or better, othwise take a loss of $280 for this options contract.

The J.E.D.I. Way will exit (or cover short position on) the August 2010 950 Put Option when Nymex Gold Futures trades at or below 1000.

The J.E.D.I. Way will exit (or cover short position on) the August 2010 1000 Put Option when Nymex Gold Futures trades at or below 1000.

EXPIRATIONS:

The April 2010 Options on the Nymex Gold expire on March 25, 2010. The June 2010 Options on the Nymex Gold expire on May 25, 2010. The August 2010 Options on the Nymex Gold expire on July 27, 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

REMINDER:
NEXT WEEK THE J.E.D.I. WAY WILL BE COVERING THE MINI-DOW FUTURES CONTRACTS AND POSTING SETUP CRITERIA AND ENTRY ALERTS FOR THE MARCH 2010, JUNE 2010 AND SEPTEMBER 2010 FUTURES OPTIONS CONTRACTS.

Until next time...

Thanks for listening, and good luck with your trading.

Best Regards,

 


 

Patrice Johnson

Author: Patrice Johnson

Patrice V. Johnson
The J.E.D.I Way

Patrice V. Johnson

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