Monday, September 12, 2011

Alpha-D Update 09/12/11

Another week brings another set of covered calls on GDX that expired unexercised at the end of last week.  I renewed them on the GDX holdings in both my IRA and taxable account.  I am more inclined to set these calls with exercise prices closer to GDX's market price at the time of execution just to see if they'll be exercised within the week.

Like I've said before, gold's bull run has a lot more to do with the Fed's ZIRP stance than with any usefulness the metal possesses as an inflation hedge.  The price of gold may not respond well to renewed inflation if consumers' purchasing power is curtailed and governments implement restrictions on gold ownership.  I will continue to allow call option expirations to reduce my GDX holdings as the weeks go by. 

No other changes to the Alpha-D are in the pipeline for right now.