streetTRACKS Gold Shares (GLD) 11/11/09 PriceWatch Alert Support Down To $107.21

Posted: Wednesday, November 11, 2009 8:13 AM EDT
By: Market Intelligence Center Staff

streetTRACKS Gold Shares (PCX: GLD) closed yesterday at $108.39. So far GLD has hit a 52-week low of $68.81 and 52-week high of $108.78. GLD has been showing support around 107.21 and resistance in the 109.37 range. Technical indicators are Bullish. GLD appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at a Jan '10 108 covered call (GCZ AD) for a net debit in the $104.49 area. That is also the break even stock price for this trade. This covered call has a 66 day duration, provides 3.60% downside protection and a 3.36% assigned return rate for an 18.58% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the GLD Jan '11 70 Call (OQA AR) and selling the Jan '10 108 call (GCZ AD) for a $35.80 debit. The trade has a 66 day life and would provide 2.39% downside protection and a 6.15% assigned return rate for a 34.00% annualized return rate (for comparison purposes only). [WBA-Seven Summits Research]