For subscribers of the SK OptionTrader service, 2013 has been phenomenal. All of the trades that we have closed have been winners, and we have added to our streak again as gold has collapsed. We were held the belief that the gold bull market had finished its run for the current cycle in February, and therefore have been profiting from the deteriorating gold prices ever since.
Last Thursday, March 11th, we recommended to our subscribers to “buy GDX Sep 21 '13 +$30/-$25 Put Spread at $0.80”. The end of the bull market would trigger an absolute capitulation in gold stocks; we had set a target of 300 for the HUI, which has now been reached. Through Friday and Monday’s trading periods the HUI crashed and fell 14.87%, resulting in a drop of 17.78% in GDX. This drove the value of our Put Spread from $0.80 to 2.20, that’s a 175% gain in just 2 trading days!