Day trading gold options

Gold Day Trader Shares His Trading Secret. Monday February 23, 2015 14:51. It does not matter what your specialty is for trading is we all have our own little trading secrets to help use better time our trades. While many day traders focus on individual stocks like aapl, goog, tsla etc. I like to focus on day trading gold. Years ago I shared this little secret on how I get an edge day trading gold and it still amazes me how many of those people still use it today, including myself. Time and time again gold traders are given great insight on how and when to day trade gold. I use the free 24hour Kitco gold chart which is shown below, and I watch it like a hawk. It is easy to get a feel for how gold moves each day with this chart. Once you get a feel for it and see price patterns repeat themselves week after week, these opportunities quickly become an easy way to add a few trades to your day trading routine. This Kitco day trading gold chart is an amazing tool for observing the price of gold over a 3 day time frame. What IЂ™m going to show you is how it can provide opportunities for day trading gold. While this chart may not look like a quality trading tool it does provides very detailed information for daytrading gold and for swing traders as they get ready to enter or exit positions. Looking at the chart below you will notice that price has similar price patterns and turning times throughout the day. Often enough the movements are very similar allowing us to take advantage of these price patterns to day trade precious metals, silver included.

Free Day Trading Gold Charts Ђ“ By Kitco. Close Up of the Spot Day Trading Gold Chart. The chart below is regular trading hours only 9:30am Ђ“ 4:00pm ET. You can see the price action following the previous dayЂ™s movements. Blue is the previous trading day and Green is the Current day. When there are large price movements in gold during these hours I like to take advantage of them using the previous days price action as my guide. If you didnЂ™t notice the Green line (Today) makes the move before the previous days move. Why? Looks to me like there are a lot of other traders out there like me getting ready for these opportunities and because its human nature to want to be first they cause the moves to happen slightly sooner than the previous day. You should factor this into your trading and be ready to take action when price looks to be starting a predicted move. Intraday Trading Gold Chart via GLD. The chart below shows the last 4 intraday sessions for gold using the GLD ETF. As you can see these sessions had very similar price movement. This is a 5 minute chart of gold using GLD. I trade it using the 3 minute chart as it allows the best timing for entering and exiting positions and this 5 minute chart keeps my head clear for the key turning points because it is easy to get caught up in the one minute chart noise and miss the important patterns.

If you prefer trading spot golc via FOREXCDFSpread Betting and you are not a US resident you can use the firm which I have been using for nearly 8 years and the broker is AVAFX. The nice thing about trading this way is that you can trade 247, you get a lot of leverage, its commission free trading, and they have 100% signup bonuses to match the amount you deposit. Example Day Trading Gold Chart. Above is the chart of GLD ETF and some actual trades. I am a very conservative trader and I like to lock in profits once I am satisfied with a move or if the chart shows any indication it may go against my position. I tend to exit trades a little too early but my focus is on catching the middle section of a trend because they are the safest areas to trade I think. When there are no swing trading setups I focus on finding these intraday day trading gold patterns along with SP500 index and Nasdaq day trades to generate my weekly income. My main focus for trading is swing trading ETFs and I have an automated trading system which i developed and it trades most of my capital on autopilot. To sum things up I wait for a trend reversal or continuation pattern to form before I enter and exit positions. I am a firm believer of using breakeven stops, meaning once a position moves a certain amount in my favor I move my exit order to my entry price so that I have a risk free trade running.

My swing trading goal for GLD ETF is 2-5% per trade which would last 2-10 days. Gold Futures and Options Trading. *The information contained within this webpage comes from sources believed to be reliable. No guarantees are being made to the content's accuracy or completeness. The History of Gold and Gold Futures Market. The Egyptians mined gold before 2,000 B. C. and the first gold coin was minted on the orders of King Croesus of Lydia in the sixth century B. C. Throughout history nations have embraced gold as a store of wealth and a medium of international exchange and individuals have sought to possess gold as insurance against the day-to-day inflationary uncertainties of paper money. Gold futures and gold options are sometimes used as an inflationary and currency hedge. Gold is often thought of as a default currency in times of economic upheaval and depreciating currency values. The United States backed its currency with gold and silver in 1792. This continued until President Richard Nixon ended the gold standard leading to dissolution of the Bretton Woods international payment system. Gold is an inactive substance and is unaffected by air, moisture and most solvents. Gold is mined on every continent with the except for Antartica where mining is not allowed. Gold is typically found in quartz veins or alluvial deposits as a free metal. Because gold is virtually indestructable most of the gold every mined is still in existence whether it be unmined or stored somewhere.

COMEX Gold Futures and Options Quick Facts. 100 ounce contract. one dollar move equals $100. trades February, April, June, August, October, December and serials. Gold futures symbol (GC) Here is the option method guide for metals courtesy of the CME Group. Pure gold is one of the most malleable and ductile of all metals which makes gold such a vital industrial commodity. It is an excellent conductor of electricity, is extremely resistant to corrosion, and is one of the most chemically stable of the elements, making it critically important in electronics and other high-tech applications. Gold future contracts opened for trading in the United States on December 31, 1974, timed to coincide with the lifting of a 41-year ban on the private ownership of gold by U. S. citizens. Today, gold future prices float freely in accordance with supply and demand, responding quickly to political and economic events. Gold can be an effective hedge against inflation. In addition, gold is often inversely correlated to the US dollar, making it a good currency hedge. As an asset class, gold has all the advantages of being universally regarded as a currency, without what are all too often the disadvantages of being subject to the economic and monetary policies of one particular country's government. Exchange-Based Gold Futures Trading.

The New York Mercantile Exchange (NYMEX) merged with the Commodity Exchange, Inc. (COMEX) in August 1994 to become the world's largest physical commodity futures exchange. Recently the Chicago Mercantile Exchange (CME) merged with NYMEX and COMEX to become the largest exchange in the world. The gold future contract is one of the most liquid of the precious metal future contracts. During the September 11 terrorist attacks the COMEX was destroyed but within days the gold futures and gold options markets were trading again. This is a testament to the strength and viability of the metals future markets. Are you a gold hedger? If so, click here to learn more. Gold Options on Futures Contracts Explained. A gold call option gives the purchaser the right but not the obligation to purchase the underlying futures contract for a specific time period and a specific price (strike price). Let's say that you wanted to purchase a June gold $1,000 call option and pay a premium of $2,200. This means that you bought the right but not the obligation to buy 100 ounces of June gold for $1,000 per ounce.

Of course, very few options are bought for the purpose of taking delivery but that is one potential outcome. Chances are that you either bought the gold option to hedge your price risk in the physical gold market (you may be a producer and own a gold mine or be a consumer like a jewelry fabricator) or you are speculating that gold prices will go higher in an attempt to make a profit. A gold put option gives the purchaser the right but not the obligation to sell the underlying futures contract for a specific time period and a specific price. Let's say that you wanted to buy a June gold $900 put option and pay a premium of $2,100. This means that you have the right but not the obligation to sell 100 ounces of June gold at $900 per ounce. The delta factor of an option represents the estimated percentage of change an option will receive based on the movements in the underlying futures contract. Let's assume the June gold $1,000 call option above has a 30% delta factor. This means that if the underlying futures contract were to rally by $1,000, then the call option would accrue by approximately $300 or 30% of $1,000 in the gold futures contract. Options are wasting assets which means that they lose value as time passes. The theta of an option is the measure of time decay. Let's assume that you bought a June gold $1,000 call option with 60 days left until expiration.

Let's also assume that the gold futures prices have moved very little over the last month and are exactly the same price 30 days later. Your option will have lost 30 days worth of time and therefore will be worth less today that it was when it had 60 days left until expiration. Vega is a measure of the implied volatility of an option contract as it relates to its underlying futures contract. For instance, if the underlying futures contract is extremely volatile then the implied volatility of the options of that futures contract will be affected. In a high implied volatility environment option premiums tend to expand. Conversely, in a low implied volatility environment the option premiums tend to decrease. *Contract information changes from time to time. Please click here to see the most recent contract specifications and click here for the most recent trading hours. Gold Futures and Gold Option Contract Specifications. 100 Troy ounces. U. S. dollars and cents per troy ounce. Trading Hours (All times are New York time) Open outcry trading is conducted from 8:20 AM until 1:30 PM. Gold futures t rading is conducted for delivery during the current calendar month the next two calendar months any February, April, August, and October falling within a 23-month period and any June and December falling within a 60-month period beginning with the current month. Minimum Price Fluctuation.

$0.10 (10ў) per troy ounce ($10.00 per contract). Maximum Daily Price Fluctuation. Initial price limit, based upon the preceding day's settlement price, is $75.00 per ounce. Two minutes after either of the two most active months trades at the limit, trades in all months of gold futures and options will cease for a 15-minute period. Last Trading Day. Trading terminates at the close of business on the third to last business day of the maturing delivery month. Gold delivered against the gold futures contract must bear a serial number and identifying stamp of a refiner approved and listed by the Exchange. Delivery must be made from a depository licensed by the Exchange. The first delivery day is the first business day of the delivery month the last delivery day is the last business day of the delivery month. Exchange of Futures for Physicals (EFP) The buyer or seller may exchange a gold futures position for a physical position of equal quantity.

EFPs may be used to either initiate or liquidate a gold futures position. Margins are required for open gold futures positions. Futures Trading Symbol. **Click Here Now! for actual gold futures and options quotes, prices, expirations, charts . To learn more about the precious metal and industrial metal futures visit silver futures , copper futures and platinum and palladium futures. Copyright © 2004-2015 TKFutures Inc. All Rights Reserved. The information presented in this commodity futures and options site is not investment advice and is for informational purposes only. No guarantees are being made to its accuracy or completeness. This information can be considered a solicitation to enter into a derivatives trade. Investing in futures and options carries substantial risk of loss and is not suitable for some people. Past or simulated performance is not indicative to future results.

How to Start Day Trading Gold. Interested in day trading gold? Here's how to get started. While you don't eat it or drink it, people are attracted to gold. It's been used as a currency because it doesn't corrode, and the material allows for some absorption of light creating that yellow glow. The value of gold fluctuates from moment to moment, as it is now traded on public exchanges where it's price is determined by supply and demand. The reasons people buy or sell gold--creating the demand and supply respectively--may be pure speculation, acquiring or distributing physical gold, hedging or commercial application. For day traders, the purpose of trading gold is to profit from its price movements. How to Day Trade Gold - Futures Markets. Day trading gold is speculating on its short-term price movements. Physical gold is not actually handled or taken possession of, rather the transactions take place electronically and only profits or losses are reflected in the trading account. There are a number of ways to trade gold.

The main way is through a futures contract. A futures contract is an agreement to buy or sell something--like gold--at a future date. Buying a gold futures contract doesn't mean you actually have to take possession of the physical commodity. Day traders close out all contracts (trades) each day, and make a profit based on the difference between the price they bought the contract and the price they sold it at. Gold futures trade on the Chicago Mercantile Exchange (CME). There is standard gold future (GC) which represents 100 troy ounces of gold, and a micro gold future (MGC), which represents 10 troy ounces. On the futures exchange, gold moves in $0.10 increments only. This increment is called a "tick"--it is the smallest movement a futures contract can make. If you buy or sell a futures contract, how many ticks the price moves away from your entry price determines your profit or loss. To calculate your profit or loss (your trading platform will also show you, but it is good to understand how it works) you'll first need to know the tick value of the contract you are trading. For a standard contract the tick value is $10. This is because the contract represents 100 ounces of gold, and 100 ounces multiplied by the $0.10 tick size results in $10. That means for each contract, a one tick movement will result in a profit or loss of $10. If it moves 10 ticks, you win or loss $100.

If it moves 10 ticks and you are holding 3 contracts, your profit or loss is $300. For a micro contract the tick value is $1. This is because the contract represents 10 ounces of gold, and 10 ounces multiplied by the $0.10 tick size results in $1. That means for each contract, a one tick movement will result in a profit or loss of $1. If it moves 10 ticks, you win or loss $10. If it moves 10 ticks and you are holding 3 contracts, your profit or loss is $30. The amount you need in your account to day trade a gold futures contract will depend on your futures broker. NinjaTrader for examples requires you have $500 in your account to open a position for one E-Micro Gold Futures (MGC) contract. You also need enough in the account to accommodate for potential losses (need much more than $500). See Minimum Capital Required to Start Day Trading Futures. To day trade a standard Gold Futures (GC) contract, you need $1000 in your account, plus additional funds to accommodate losses. The amount required by your broker to open a day trading position is called Intra-day margin it varies by broker and is subject to change. These figures assume you are day trading, and closing out positions before the market closes each day. If you hold positions overnight, you are subject to Initial Margin and Maintenance Margin requirements, which will require you have more money in your account. How to Day Trade Gold - ETFs andor Stock Market. Another way to day trade gold is through a fund which trades on a stock exchange, like the SPDR Gold Trust (GLD). If you have a stock trading account, you can trade the price movements in gold. The trust holds gold in reserve, and therefore, its value is reflective of the price of gold.

The price of the SPDR Gold Trust is approximately 110 of the price of gold. So if gold futures are trading at $1500, then the Gold Trust will trade at approximately $150. The trust trades like any stock. The minimum price movement is $0.01, therefore you make or lose $0.01 for each share you own each time the price changes by a penny. Stocks and ETFs are typically traded in 100 share blocks (called lots) so if the price moves a penny and you are holding 100 shares, you make or lose $1. If the price moves $1, from $120 to $121, you make or lose $100 on your 100 share position. If you are holding 500 shares, you make or lose $500 on that same price move. The amount you need in your account to day trade a gold ETF depends on the price of the ETF, your leverage and position size. To day trade stocks or ETFs in the US you're required to have a $25,000 minimum balance in your account. Depending on how much income you want to generate and your leverage, you may wish to have more than $25,000 available to you. See Minimum Recommended Capital For Day Trading Stocks for guidance on how much capital you should start day trading ETFs and stocks with.

Learn How To Trade Gold In 4 Steps (GLD, GDX) Whether bull or bear, the gold market offers high liquidity and excellent opportunities to profit in nearly all market environments due to its unique position within the world’s economic and political systems. While many folks choose to own the metal outright, speculating through the futures, equity and options markets offers incredible leverage with measured risk. (See related: Gold Price: Catching Resistance off of the 2015 Trend-Line.) Market participants often fail to take full advantage of gold price fluctuations because they haven’t learned the unique characteristics of world gold markets or the hidden pitfalls that can rob profits. In addition, not all investment vehicles are created equally, with some gold venues more likely to produce consistent results while others frustrate most attempts to profit. Trading the yellow metal isn’t hard to learn, but the activity requires skill sets unique to these markets. While broad-based experience assists bottom line results, seasoned professionals will benefit by incorporating four strategic steps into their daily routines. Meanwhile, novices should tread lightly, experimenting until the intricacies of these complex markets become second-hand. 1. Learn What Moves Gold. As one of the oldest currencies on the planet, gold has embedded itself deeply into the psyche of the financial world. Nearly everyone has an opinion about the yellow metal, whether or not they’re taking risk, but gold itself reacts only to a limited number of price catalysts. Each of these forces splits down the middle in a polarity that impacts sentiment, volume and trend intensity: Market players face elevated risk when they trade gold in reaction to one polarity when another polarity is controlling price action.

For example, a selloff hits world financial markets, and gold takes off in a strong rally. Many traders assume that fear is moving the yellow metal and jump in, believing the emotional crowd will blindly carry price higher. However, inflation fears may have triggered the decline, attracting a more technical crowd that will sell the rally aggressively. Combinations of these forces are always in play in world markets, establishing long-term themes that track equally long uptrends and downtrends. For example, the Federal Reserve (FOMC) economic stimulus begun in 2009 initially had little effect on gold because market players were focused on high fear levels coming out of the 2008 economic collapse. However, this quantitative easing encouraged deflation, setting up the gold market and other commodity groups for a major reversal. That turnaround didn’t happen immediately because a reflation bid was underway, with depressed financial and commodity-based assets spiraling back toward historical means. Gold finally topped out and turned lower in 2011 after reflation was completed and central banks intensified their quantitative easing policies. VIX eased to lower levels at the same time, signaling that fear was no longer a significant market mover. 2. Understand the Crowd. Gold attracts numerous crowds with diverse and often opposing interests. Gold bugs stand at the top of the heap, collecting physical gold and allocating an outsized portion of family assets to gold equities, options and futures.

These are long-term players rarely dissuaded by downtrends that shake out less ideological players. In addition, retail participants comprise nearly the entire population of gold bugs, with few funds devoted entirely to the long side of the precious metal. Gold bugs add enormous liquidity while keeping a floor under futures and gold stocks because they provide a continuous supply of buying interest at lower prices. They also serve the contrary purpose of providing efficient entry for short sellers, especially in emotional markets when one of the three primary forces polarizes in favor of strong buying pressure. In addition, gold attracts enormous hedging activity by institutions, who buy and sell in combination with currencies and bonds in bilateral strategies known as “risk-on” and risk-off.” Funds create baskets of instruments matching growth (risk-on) and safety (risk-off), trading these combinations through lightning fast algorithms. They are especially popular in highly conflicted markets in which public participation is lower than normal. 3. Read the Long-Term Chart. Take time to learn the gold chart inside and out, starting with long-term history that goes back at least 100 years. In addition to carving out trends that persisted for decades, the metal has also trickled lower for incredibly long periods, denying profits to gold bugs.

From a strategic standpoint, this analysis identifies price levels that need to be watched if and when the yellow metal returns to test them. Gold’s recent history shows little movement until the 1970s, when it took off in a long uptrend, underpinned by rising inflation due to skyrocketing crude oil prices. It turned lower near 700 in the early 1980s, in reaction to restrictive Federal Reserve monetary policy. The subsequent downtrend lasted into late 1990s when gold entered the historic uptrend that culminated in the 2011 top. A steady decline since that time has relinquished more than 700 points in 4 years. Liquidity follows gold trends, increasing when it’s moving sharply higher or lower and decreasing during relatively quiet periods. This oscillation impacts the futures markets to a greater degree than it does equity markets, due to much lower average participation rates. New products offered by Chicago’s CME Group in recent years haven’t improved this equation substantially. CME offers three primary gold futures, the 100-oz contract, a 50-oz. mini contract and a 10-oz micro contract added in September 2011. While the largest contract traded close to 200K lots per day in 2015, the smaller contracts were not widely traded, averaging less than 500 lots per day for the mini and less than 2500 for the micro.

This thin participation doesn’t impact long-dated futures held for months but strongly impacts trade execution in short-term positions, forcing higher costs through slippage. SPDR Gold Shares (GLD) shows the greatest participation in all types of market environments, with exceptionally tight spreads that can drop to one penny. Average daily volume stood at 5.39 million shares per day in September 2015, offering easy access at any time of day. CBOE options on GLD offer another liquid alternative, with active participation keeping spreads at low levels. Market Vectors Gold Miners ETF (GDX) grinds through greater daily percentage movement than GLD but carries higher risk because correlation with the yellow metal can vary greatly from day to day. Large mining companies hedge aggressively against price fluctuations, lowering the impact of spot and futures prices, while operations may hold significant assets in other natural resources, including silver and iron. Trade the gold market profitably in four steps. First, learn how three polarities impact the majority of gold buying and selling decisions. Second, familiarize yourself with the diverse crowds that focus on gold trading, hedging and ownership. Third, take time to analyze the long and short-term gold charts, with an eye on key price levels that may come into play. Finally, choose your venue for risk taking, focused on high liquidity and easy trade execution.

(See also: The Effect of Fed Fund Rate Hikes on Gold.) How To Buy Gold Options. Buy gold options to attain a position in gold for less capital than buying physical gold or gold futures. Gold options are available in the U. S. through the Chicago Mercantile Exchange (CME), so if you've wondered how to invest in gold, here's a shorter-term and less capital intensive way to do it. How to Invest in Gold: Calls and Puts. Use options to profit whether gold prices rise or fall. Believe the price of gold will rise? Buy a gold call option. A call option gives the right, but not the obligation, to buy gold at a specific price for a certain amount of time (expiry). The price you can buy gold at is called the strike price. If the price of gold rises above your strike price before the option expires, you make a profit. If the price of gold is below your strike price at expiry, you lose what you paid for the option, called the premium.

(For more on how to decide which call or put option to use, see " Which Vertical Option Spread Should You Use? ") Put options give the right, but not the obligation, to sell gold at a specific price (strike price) for a certain amount of time. If the price of gold falls below the strike price, you reap a profit of the difference between the strike price and current gold price (approximately). If the price of gold is above your strike price at expiry, your option is worthless and you lose the premium you paid for the option. It is not necessary to hold your option till expiry. Sell it at any time to lock in a profit or minimize a loss. Gold Options Specifications. Gold options are cleared through the CME, trading under the symbol OG. The value of the options is tied to the price of gold futures, which also trade on the CME. 40 strike prices are offered, in $5 increments above the below the the current gold price. The further the strike price from the current gold price, the cheaper the premium paid for the option, but the less chance there is that the option will be profitable before expiry. There are more than 20 expiry times to choose from, ranging from short-term to long-term. Each option contract controls 100 ounces of gold.

If the cost of an option is $12, then the amount paid for the option is $12 x 100 = $1200. Buying a gold futures contract which controls 100 ounces requires $7,150 in initial margin. Buying physical gold requires the full cash outlay for each ounce purchased. To buy gold options traders need a margin brokerage account which allows trading in futures and options, provided by Interactive Brokers, TD Ameritrade and others. Gold options prices and volume data are found in the Quotes section of the CME website, or through the trading platform provided by an options broker. Calls and puts allow traders a less capital intensive way to profit from gold uptrends or downtrends respectively. If the option expires worthless, the amount paid (premium) for the option is lost risk is limited to this cost. Trading gold options requires a margin brokerage account with access to options. trading+gold+options. Narrow Your Search. Tech Culture (151) Tech Industry (149) Internet (54) Mobile (44) Phones (42) Computers (28) Gaming (28) Gadgets (12) Security (11) Software (10) Audio (8) Applications (5) Sci-Tech (5) Smart Home (5) Video Games (4) Online shoppers are liking those speedy checkout options. Manuel BlondeauCorbis via Getty Images Apple Pay so far hasn't inspired people to burn their wallets, but there's one type of newer digital payment that's gaining traction. Visa on Thursday. By Ben Fox Rubin 06 April 2017.

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Although Samsung has been tight-lipped about. By Gordon Gottsegen 13 March 2017. Sean Spicer's St. Patrick's Day tie is a meme pot of gold. CNET White House press secretary Sean Spicer's green tie is a St. Patrick's Day gift to social media. Traditionally, you're supposed to wear green on the Irish holiday, the same color as the. By Alfred Ng 17 March 2017. Dodgy LED lamps lead authorities to gold hidden in man's butt. It seems Indian gold smugglers have borrowed from the golden goose's playbook. A 36-year-old man was caught trying to smuggle 1.2 kilograms (about 2.6 pounds) of gold from Singapore to Hyderabad. By Aloysius Low 13 February 2017. Nothing says Trump-Putin bromance like gold-plated iPhones. Caviar Much has been made of the seemingly cozy relationship between US President Donald Trump and Russian President Vladimir Putin. Should you wish to revel in their apparent bromance, you can. By Leslie Katz 30 January 2017.

Subaru, Acura claim gold medals in KBB 5-year cost-to-own awards. Buyers often compare costs based on a car's window sticker, but rarely do they dig in and evaluate long-term ownership costs. Thankfully, Kelley Blue Book takes care of that, and its annual 5-Year. By Andrew Krok 08 February 2017. OnePlus 3T available in gold -- gold! -- on January 6. 2:11 Close Drag Autoplay: ON Autoplay: OFF One of our favorite Android phones, the OnePlus 3T, is getting a fresh coat of gold paint. It will be available in limited supply on January 6 and only. By Lynn La 05 January 2017. Catch this gold Pikachu Pokemon trading card for $2,000. Enlarge Image The Pokemon Company While the Pokemon Trading Card Game may have been put aside for more modern endeavours, this 20 year celebratory card might be that one final must-have for the. By Adam Bolton 26 October 2016. © CBS Interactive Inc. All Rights Reserved. The Sinful Pleasures of Day Trading.

Just as teenagers are going to find out about sex, adults are going to find out about day trading. Say this for the kids, at least they're using condoms. It's the thrill-seeking grownups we need to worry about. Many were once content to hope they would someday sell their screenplays to Hollywood, or patent some fabulously clever kitchen device. Now they dream of rolling out of bed at 9, settling down in front of the computer in slippers and sweats, and deftly siphoning five grand from the yen, soybean or Nasdaq markets before lunch. What a life! For some, of course, it's no dream. There are at-home traders who make that kind of money on average every day. But not many. And for every winner there are far more losers who will profoundly regret the day they gave up their boring jobs, rotten wages and two-hour commutes for a shot at easy street. I've known both kinds, since the daily newsletter I publish is geared to traders of stocks, commodities and options. One of them, a guy I'll call Ken who took up the game just six months ago, wrote to tell me he's up $173,000 so far. He just put $60,000 of into a new kitchen. That's not bad for someone who was driving a cab when he arrived in San Francisco and who more recently was selling real estate.

I wish I could say it was my advice that changed his life, but I'm just one of a half-dozen advisors that he follows. In fact, he's outperformed me by far in recent months and could probably teach all of us gurus a thing or two. It's not beginner's luck, either, but a potent combination of brains and diligence that has made Ken a successful trader in the space of a few months. Never have I known anyone more committed to profitability. During the short time he has been involved in the market, he evidently has read and absorbed the contents of a small library of books on trading, incorporating their most valuable ideas into his daily regimen. He also has mastered the vast resources available to traders on the Internet and could probably tell you exactly how many seconds it takes to place a trade using any online broker. Ken has never been tested by a bear market, though, and that is why his unflinching confidence is as yet fragile and immature. "I can't see how investing in some of the most successful companies in the orld could be risky over the long term," he says. Historically speaking, he's right, of course, but it remains to be seen whether his deep faith in history will abide the stock market's next grizzly inquisition. But as long as share averages keep rising, naiveté will surely be his magic charm. Lest Ken's success tempt too many of you from the warmth of the corporate womb, here are some cautionary thoughts of my own that have evolved over the 35 years I have been a student of the stock market, a trader and an options market-maker.

In the zero-sum game of day trading, patsies do not long survive. The competition eats nails for breakfast, flies to Vegas at least twice a year to play poker or gin rummy, and knows the point spread for each and every NFL game. Day trading gold options Gold daily chart. Since time in memorial, gold has played an important role in the financial market. It has been synonymous with luxury and power. In the past, it used to make religious idols, honor monarchs and serve as currency. In the United States, the dollar was pegged to gold until 1971 when this peg was removed. To date, the Federal Reserve and other central banks around the world hold huge deposits of gold for emergency purposes. After the great depression, the Roosevelt administration fixed the price of gold at $35ounce. This was removed by the Nixon administration in 1971 leading to a 2,200% gain in its price resting at $800 before going down to $260 in 1999. After this fall, gold began a bull run and is today trading at $1,136. These fluctuations are very important for traders who can make a lot of money in the process.

In this article, I will explain a few strategies to help you trade gold spot prices. Fundamental and intermarket factors. As a commodity, gold prices depend on a number of factors such as supply and demand. In addition, monetary and fiscal decisions play an important role in pricing gold. In a strong economy, there is increased confidence for investors to buy gold. As a result, the price keeps on going up. The better the returns in the bond and stocks market leads to higher returns in gold prices. Historically, a strong dollar leads to strong gold and vice versa. As a day trader, you need to have a holistic approach about the fundamentals so that you can know when to enter and exit a trade. Presently, the Federal Reserve is contemplating raising interest rates. As the year progresses, I expect that the price of gold will fall in anticipation of the tightening measures.

1 month chart of Gold and EURUSD. Technical strategies. For day traders, price movements are key to make sweet returns in gold trading. In many cases, gold will follow a certain trend. Therefore, it is your responsibility as a trader to find the trend and enter a position. To identify a trend, trend analysis is very important. Luckily, there are tools (indicators) which can help you in this. For short term trades, you simply want to identify the support and resistance levels. Trendlines also play a very significant role in confirming other technical indicators such as those generated by MACD and Relative Strength Index (RSI). In my experience, I have identified the best method as one where I wait for the trendline to be breached before I make my entry position. To create an upward trend, the best method is to connect a series of rising bottoms and finding a support opportunity.

On the other hand, a downward trend is created by joining a series of highs. Another technical method to use is that of moving averages because they are simple to use and easy to generate. The best buying position is when the shorter term, faster moving average passes above the slower one. Also, you can sell when the faster average crosses below the slower average in a trending market. To execute this method in the best way, you need to first understand the type of market, whether it is a trending market or a range bound market. Other trend analysus indicators you can use include: Bollinger bands, envelopes, and standard deviation. Identifying a divergence is also very important. A good indicator to help you in this is the Relative Strength Index (RSI). Quite often, the RSI will hit highs and lows as gold price turns either down or upwards. To place a trade, you should always try to find a confirmation of the divergence. Confirmation leads to an increase in confidence.

With increased confidence, the result will be a better trade. To make sweet returns in trading gold, you need to understand the key factors that lead to price movements. In addition, having a good understanding about the economy will help you make confident results. After understanding the macro conditions, you should now focus on technical analysis. By understanding the trend, and knowing how to identify the divergence, you will be at a good position to make good entry and exit decisions. How to Trade Gold with ETFs and Options. By Larry D. Spears , Contributing Writer , Money Morning &bull March 21, 2012. Start the conversation. With few exceptions, most leading financial gurus agree that every portfolio should include some physical gold. But while the yellow metal itself is great as a long-term hedge against turmoil and inflation, it's a lousy trading vehicle. For shorter-term trading purposes, most gold investors look first to the futures markets, generally focusing on either the CME Group's full-size COMEX contract, which represents 100 ounces of the metal, currently valued around $165,000, or its little brother, the 50-ounce miNY gold future.

However, that can be a fairly costly proposition, with initial margin requirements on a single 100-ounce contract running in excess of $10,000. And, as anyone who has held those contracts in recent weeks can attest, it can also be an extremely risky one. For example, the single-day loss on a 50-ounce miNY future on Feb. 29 was $3,845, with the intraday trading range topping $5,200. Similarly, last Wednesday's one-day decline of $51.30 an ounce in the price of the full-size April future would have cost traders on the wrong side of the move a whopping $5,130. Even recent intraday moves have been scary. On March 9, April gold futures plunged $27.70 an ounce shortly after the open, only to rebound and trade as much as $39.50 an ounce higher later in the day. That swing had a total value of $6,720 – in a single 5-hour and 10-minute trading period! So, if those numbers give you pause, but you'd still like to mine for profits in the gold market, what can you do? How to Trade Gold ETFs. For trading purposes, you can find some pretty good proxies for gold futures that require substantially less cash up front and carry significantly lower risk. Tops on my list of alternatives to futures are exchange-traded funds (ETFs) linked to gold, and the highly liquid put and call options available on the leading ETFs. There are now more than two dozen ETFs tied to the gold market in one way or another – either backed by physical gold, portfolios of futures and options positions, or linked to gold and mining stocks. Some almost precisely mimic the price movements of the metal itself. Others are leveraged to produce price changes two or three times as large as physical gold, and some are structured to move in the opposite direction from the yellow metal (so-called "inverse" funds).

The two largest and most actively traded gold ETFs – and the two that most accurately mirror gold price movements – are: The SPDR Gold Trust (NYSEArca: GLD), recent price $160.73 – Backed by holdings of physical gold, this is by far the largest of the gold ETFs with a market capitalization of around $68 billion and an average daily trading volume of more than 150,000 shares. The fund's shares, which are issued by the Trust in minimum blocks of 100,000, are priced at roughly one-tenth the one-ounce price of physical gold, less management expenses equaling 0.40% of assets. The iShares Gold Trust (NYSEArca: IAU), recent price $16.13 – IAU is a grantor trust that's also backed by holdings of physical gold. Shares are initially issued in minimum blocks of 50,000 and are valued at roughly 1% of the gold's current market price. IAU is the second largest gold ETF with a market cap of around $9.2 billion and an average daily trading volume approaching 100,000 shares. The fund's expense ratio is one of the lowest in the business, running at just 0.25% compared to the industry average of 0.53%. Shares of both funds trade just like those of any common stock or other ETF, with prices quoted on a per-share basis. Thus, if you want your gains and losses to roughly mirror those on a single ounce of physical gold, you would buy 10 shares of GLD or 100 shares of IAU. So that you can see exactly how these ETF shares track actual gold prices, Table 1 compares prices for GLD and IAU with the price of the nearby April COMEX gold futures contract at key points over the past couple of weeks: For cost-comparison purposes, 100 shares of GLD would cost about $16,150, or half that if purchased on margin, versus the $10,250 margin deposit and $165,000 value for a COMEX gold future. A hundred shares of IAU would cost just $1,620 or so, again about the value of one ounce of gold. More importantly, with both funds, the losses would be proportionately smaller than the risks on a gold futures trade – a key consideration when the market is highly volatile as it has been recently. As an example, when April futures prices plunged $51.30 last Wednesday to give contract holders a loss of $5,130, the owner of 100 shares of GLD would have lost just $256 ($162.13 – $159.57 = $2.56 x 100). Of course, any gains would also be proportionately smaller, but the percentage returns would be roughly the same – or even larger if trading on margin. Trading Options with Gold ETFs. As noted earlier, if you don't want to plop down the cash to purchase 100 shares of GLD, the ETF also has actively traded options over a wide range of strike prices and expiration months.

( Note: Options are also available on IAU, but because of the lower share price only the first couple of months and nearest strike prices are actively traded.) That means, based on quotes early in Friday's trading session, you could purchase an at-the-money GLD April $161 call option for around $3.30 a share, or $330 for a full 100-share contract. That option would give you the right to buy 100 shares of GLD at a price of $161.00 a share ($16,100) at any time between now and the April 20 expiration date. If gold rebounds to its March 1 level of $1,720 in the next month, carrying GLD to around $167, that call would increase in value to $6.00 a share (or slightly more), giving you a gain of $270 or so – a return of more than 80% on your initial $330 investment. In under a month! Similarly, if you've turned bearish on the yellow metal for the short term, but don't want to unload your physical gold, you could buy put options on GLD. As quoted Friday, an at-the-money June $161 GLD put would cost you about $5.25, or $525 for the full contract. That option would give you the right to sell 100 shares of GLD at $161.00 per share any time between now and June 15, at least partially offsetting the losses on your gold holdings should the price continue to drop over the next three months. To illustrate how the option premiums track both GLD share prices and the overall price of gold, Table 2 shows the price changes in the April $166 GLD call and put (the at-the-money options on March 2) in response to gold price movements over the past couple of weeks: Obviously, both the outright call purchase and the outright put purchase just described would be speculative plays, but that's not the only way you can use them. The options on gold ETF shares can be used in any of the conservative or hedging strategies detailed in the "Options 101" articles Money Morning has published the past few months, or with any of the techniques discussed in our earlier "Defensive Investing" series.

Editor's Note: If you want some alternative gold ETFs to GLD and IAU – or would prefer to try the leveraged or inverse funds – you can access lists of each via the related story links below. Binary Options Trading VIDEO Tutorial – How To Make 75% Every 15 Minutes. Seven Ways to Tell If Your Gold Is Real. Gold is the best safe haven there is, but knowing how to steer clear of fakes is critical. Take action today and learn seven proven methods to ensure the gold you own is genuine. Enter your email below to get the report. Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning. com visitors become smarter, more confident investors.

© 2017 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. Address: 1125 N Charles Street Baltimore, MD, 21201 | Phone: 888.384.8339 I Disclaimer | Sitemap | Privacy Policy | Whitelist Us. Day trading gold options I have written a lot lately on this blog about my secret stock replacement method. I want to expand on this technique by showing you how I have made $1000 a day using this method. As you remember the secret stock replacement method is buying deep in the money call and put options to replace buying the actual stock. The advantage of using options is that gives you free juiced leverage 10 to 20 times, with limited downside and low capital requirements (you only have to put 110 or 120 of the amount compared to buying the actual stock). And this secret stock replacement method allows you to trade with an account as little as $5000 to make a $1000 a day swing trading and day trading stocks. This honestly is one of the most exciting methods I have ever found to make a living trading in the market, I have personally made on several occasions $2000 or more in a day using this technique and at the time I was only trading a $5000 account. The key to this method is to find highly volatile, liquid stocks that have options with high trading volume so that you have a very small spread when you buy the option. What this means is when you are day trading or swing trading stock options, you only want to buy puts and calls that have very tight spreads, (the spread is the difference between the bid and ask). You want the spread to be pennies.

Next, you need to understand that in the short term (anywhere from 1 to 5 days) price action, money flows and technicals drive 95% of the stock price in the short term. So you need to know what chart patterns work in the short term and luckily there are a few great ones that work almost all of the time. Lastly, you need to use my secret stock replacement technique, that is only buy options that are deep deep in the money, so that the option moves almost one for one with the stock. So to use this secret stock replacement tecnique of day trading swing trading options you need the follow these rules every time: 1) Only trade stocks that have options that are very liquid with high volume, so that you when you buy the put or call the spread is very low, (it should be pennies) so that you are not paying a big premium on every trade. 2) Only trade volatile stocks with great short term chart patterns. Like the one I found in Coach ($COH). 3) And most importantly, you want to use my secret stock replacement method of only buying deep in the money calls and puts, in which the options moves almost one for one with the stock.