Investors with as little as 3 to 5 thousand dollars can ostensibly cash in soon on the precarious position of the price of gold on today’s Commodities markets. According to charts dating back to the beginning of recorded price fluctuations of the markets the price of gold has not only never been higher it has never held its high price for so long. As many investors know gold is at record price levels and has been for over a year. According to the past 25 years gold has never been higher than about $1,000 an ounce when it peaked on only two occasions and the duration of time that $1,000 peak held its place was very short. The daily quote on gold was at last check for me over $1,200 an ounce and that price represents not only all time highs for gold but also close to the most people will pay for it in today’s economy. With put options in the gold market today purchased for as little as $500-$1,000 each investors can cover the next year anticipating the fall of gold prices and when it falls, again according to the charts, it will fall hard possibly to as low as $450-$550 an ounce. This drop would mean tens of thousands of dollars profit per put option if held as long as the market tended to drop and is all predicated on the fall of gold prices which they must do only not given when. Again according to Commodities charts the peak prices in most markets last less than 1 1/2 years, most less than that, and fall suddenly, hard and fast. With a $3,000 futures account any investor shopping they’re own put options should be able to outlast the drop as puts can be purchased with three to four months of time value and by budgeting ones purchases you could be covered from now until over a year from now possibly two.
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When this market falls it will come as a surprise to everyone so don’t look for any of the signs now. Also for those in the market with short futures or put options it will be a windfall because as they say the higher it goes the harder it falls meaning in this case a frenzy to cover long future positions and cabinet call options. One hundred dollars fall in the price of Gold equates on a futures contract to $10,000 (100 ounces X $100 an ounce). Given that the drop anticipated according to the charts is from its high, say 1200 to a bottom of say even 600, 600 times 10,000 dollars is $60,000 for put options at the money, however volatility of the market is going to make almost any put option you purchase now cheaply just as profitable. I estimate 40 to 60 thousand dollars profit is the profit potential of put options purchased now, close to the money for 300 to 500 or even 1000 dollars each with 3 to 4 months of time value. Bottom line-with one 500 put option purchase if the Gold market drops tomorrow there is a $50,000 profit in it.

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Posted by admin on April 16th, 2011 :: Filed under admin
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