This complimentary article from Options Profits was originally published on February 1 at 9:33am EST. Don't risk missing over 40 options trade ideas every week and exclusive commentary from over 10 experts. Click here for more information and a 14-Day Free Trial.
Welcome to the weekly resource brief where we break down opportunities in the dynamic commodities markets. The mandatory use of options allows us to control risk and take advantage of longer term trends in the true Supply and Demand markets.
These futures options have many advantages and offer a more pure play with leverage on leverage benefits not available with typical equity options plays.
In addition to identifying profitable option plays the intention is to educate, inform and even entertain with our discussion about the vital economic building blocks, Commodities, that are the underlying basis for all investments.
Briefing for February 1 - Dollar Grain Gain and Cup Commodity Costs
As we have just concluded January, it is time to evaluate the markets and find some keys for the weeks ahead. Stocks as viewed by the S&P 500 have rallied 5% since the New Year with four weeks of consecutive gains. The yearly highs up above are the next resistance to overcome.
By the way that post financial crisis record 1370 level is only a little more than 3% higher and well within target range. In fact, that broad based stock index that all investments are scored against for performance is closing in on DOUBLING since the March 2009 extreme lows. S&P 1450 is the next breakout objective with the ALL TIME HIGHS from 2007 only another 100 points above that to erase the losses over the last five years.
Don't Call It A Comeback - Leverage On Leverage
What a month it has been with Gold leading the charge higher to print $1750 an ounce today and double digit gains for January. The Resource Alert $1750/$1825 June Gold spread is now At-The-Money, meaning it will gain at a faster rate on upward moves, after cashing in money last week.
Technically the first objective was $1725 where we unloaded half of the positions to pocket a nice round $1000 per play. The actual Gold price jump from $1610 where prices stood when we entered out spread was a modest 6% plus move. The POWER OF OPTIONS paid off with a gain TEN TIMES that amount with completely limited risk to see a 67% profit return in little more than two weeks.
Another bonus is that half of the position remains for more upside gains. The spread maximum is $7500 with expiration May 24th for many more months of bullish trend development.
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