I've traditionally been a Covered Call guy but I've been considering the following trade and would like to hear feedback from more experienced options traders.
My underlying belief is that GLD will continue to climb.
Here's the trade:
STO 4 GLD Mar 106 Puts @ $2.50
BTO 2 GLD Mar 118 Call @ $4.85
The trade will execute at a cost of around $0.
If GLD rises above 118 - I participate dollar for dollar.
If GLD falls below 106 - I'm the proud owner of 400 shares or I roll forward.
If GLD stays in a narrow trading range - nothing gained, nothing lost.
Feedback?
Chuck F.
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