My short puts options under GDX in my IRA were exercised when the share price declined through the exercise price, so I had to increase my GDX position. I have long maintained that GDX is part of my hard asset hedge against US dollar inflation so I don't mind acquiring some at such a low price. How low is that? It trades at just over $20, a level it hasn't seen since November 2008. I believe GDX is not by any means a perfect hard asset hedge because it only covers one commodity - gold. I'd prefer to see it sold away at some point so I can add other hard asset hedges, but buying it at a five-year low price is a choice I can tolerate. Like I said last month, my time horizon in my retirement account is far longer than the horizon for my taxable account, so I can tolerate more risk there.
I decided to write covered calls against that GDX position because I believe the price of gold is not going up in value anytime soon. Mining companies are going through serious margin compression and even the big miners in GDX can't escape. Selling pressure from hedge funds and retail investor outflows from gold ETFs are acting as strong headwinds against any recovery in the price of gold bullion. I noted the yield I collected in those covered call premiums on GDX and it reminded me of my best years several years ago when covered calls provided most of my portfolio gains. Sectors experiencing bear markets are funny that way.
My GDX position in my taxable account remains unchanged, with no option positions. I'm not going to monkey with that allocation until the price increases. GDX is volatile and is somewhat uncorrelated with the larger equity market.
My covered calls over FXF in my IRA expired unexercised. I renewed them for another month. The Swiss have done a bang-up job stabilizing their currency. It's another inflation hedge for me.
I remain long FXA and FXC in my taxable account. The declines in price do not bother me because neither Australia nor Canada are destroying their currencies with fiscal and monetary insanity. Oh yeah, they also have lots of mining and energy exposure in their economies. I like that kind of arrangement.
I still have a long put position against FXE in my taxable account because I doubt the ability of the euro to survive in its present form for the long term. I bought it cheaply. I reserve the right to add more long puts. Europe has not solved its problems despite the headlines I've read about the Greek stock market's recovery and plans for a multilateral bank resolution mechanism.
I'm sitting on my cash pile, waiting for some sort of breakdown. I'll see that crash at the same time the rest of the world sees it. I intend to buy while hedge funds and mutual funds are selling. That's all for now.