Spider Gold Shares (GLD, $93.21, up $3.00) are finally rallying after a couple of weeks of doing nothing. Gold started to rally yesterday when the bank stocks started to fall and is up $30 today to $945 an ounce, a seven-month high. Gold bulls are buying the metal amid doubts over the new economic rescue plans.
The ETF (exchange-traded fund) is up 3% but a couple of the call options we are following are up over 50% and 65%, respectively. Granted, our entry prices were a little higher from where these contracts closed on Tuesday but overall, they are now profitable for us.
The March 99 calls (GLDCU, $2.30, up $0.90) and the March 100 calls (GLDCV, $2.10, up $0.70) were profiled on February 2 at $2.05 and $1.90. Let’s set initial exit targets at $3.00 for the 99’s and $2.75 for the 100’s. Our stops are set at 50% below our entry points.