The strategy I would personally use would depend on how bearish
I am on GDX. If I'm bearish, I would just short the stock outright.
If I'm mildly bearish or neutral, I prefer to just sell short the
out-of-the-money calls like fixdgear mentioned below. This is a
good strategy to use if I don't have any strong bias on the
underlying stock. Or I would write a covered put. Short the stock,
and short the out-of-the-money puts or at-the-money puts. Of
course, if GDX drops big, one would make less employing these
strategies instead of just shorting the stock outright.
Newsletter
Subscribe to our email list for regular free market updates
as well as a chance to get coupons!
The strategy I would personally
BPGDM and GDX swing system
Posted by cw12 on 18th of Dec 2010 at 01:54 pm
The strategy I would personally use would depend on how bearish I am on GDX. If I'm bearish, I would just short the stock outright. If I'm mildly bearish or neutral, I prefer to just sell short the out-of-the-money calls like fixdgear mentioned below. This is a good strategy to use if I don't have any strong bias on the underlying stock. Or I would write a covered put. Short the stock, and short the out-of-the-money puts or at-the-money puts. Of course, if GDX drops big, one would make less employing these strategies instead of just shorting the stock outright.