Selling half my Gold Calls

In my "Now what do I do?" post the other day, I needed to decide what I should do with this profitable call position. There are a lot of conflicting indicators...most of it anti-Gold here...a weekly and daily negative divergence (and also in the CRB index and equities.)

We did close on a new high dating back to May, but again, the volume is not what it should be for a rise like this (thus the divergence in the MACD.) I even remember someone on CNBC mentioning in passing last week that the big movement was a result of computer trading.

But, the markets have been trading so un-fundamentally, for lack of a better word, that maintaining my short in Gold, and selling my entire call position, would be too risky. So, my decision will be to sell 5 of my 10 contracts and take a handsome profit (when the options market opens on Tuesday.) At the same time I will be able to maintain the protection for my short position by keeping the other half.

It will be interesting to see what the Ozzie and Canadian Dollar do before Chicago opens Tuesday. (The other thing I could do is turn the rest of my calls into a long straddle position, because I think that whatever Gold decides to do, the move will be big. The only problem is that it would not be a delta neutral trade as I will be short more then long.)

New statement (including the Bob Iaccino account,) later today.