NYMEX Gold Put Option Trading Alert

By: Patrice_V_Johnson

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

The J.E.D.I. Way will received a fill of $3.00 on its SECOND purchase order of the following put option on Nymex Gold on Monday, February 1, 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:

Note: Nymex Gold April 2010 Futures breached the 1075 price level as I believed it would on Thursday, February 4, 2010. (not shown in the above chart) Nymex Gold April 2010 Futures closed Friday, February 5, 2010 at 1052.80.

INITIAL COST FOR FIRST PUT OPTION/INITIAL COST FOR SECOND PUT OPTION:
($470.00) / (300.00)

BREAKEVEN (w/$20.00 commissions per round turn):
$490.00 (or 4.90) for the April 2010 Nymex Gold 950 Put Option No. 1
$320.00 (or 3.20) 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 $320.00 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 $320.00 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.

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