WTF Wednesday – Winning With President Trump

Image result for hail trumpAll hail Trump! 

Though I am, of course, disappointed in the outcome of the election and though I did not see it coming at all, as a good trader I was still prepared for the possibility of a Trump Presidency with our Trump Hedge Alert, that I sent to our Members last Tuesday afternoon, which was:

So we need something that will pop on a Trump victory that we don't mind owning if he doesn't win.  ABX springs to mind.  

In the STP, let's add the following Trump Trade:

  • Sell 20 ABX 2019 $15 puts for $2.80 ($5,600)
  • Buy 50 ABX 2018 $15 calls for $5.50 ($27,500)
  • Sell 50 ABX April $21 calls for $1.50 ($7,500) 

That's net $14,400 on the $30,000 spread and, of course, it's rollable so we may be able to squeeze another $10,000 out of it if gold goes up but not too fast.  Downside is owning 2,000 ABX at net $22.20 ($15 strike plus the cost of the spread/2,000 shares) but that would be the LTP's problem by then!  

Figure the worst case is ABX is back


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