Tuesday, September 25, 2012

More Alpha-D Option Updates for 09/25/12

The options trades I tried to execute yesterday didn't get accepted.  I have no idea why nothing worked but I tried again today and they went through just fine.

I wrote covered calls on my long GDX position, some of which were very close to at-the-money and others that were farther out.  I do this to gradually whittle down my gold position as inflation ramps up.  This may seem odd to those gold bugs who are convinced that gold is always and everywhere the best possible hedge against inflation.  I am not similarly convinced, and I do not regard gold with religious fervor.  It has its use in an era of generally rising prices but it is of limited use in true hyperinflation.  That's where the U.S. is headed eventually thanks to the Federal Reserve's permanent stimulus and the government's unfunded entitlements.  I'm reducing gold as it rises to make room in my portfolio for other hard asset equities that will keep pace with hyperinflation.

I also renewed my cash-covered short put position under FXF, a currency ETF I wouldn't mind owning.  The Swiss central bank can't hold down the franc's value forever.  Maybe I'll just go ahead and buy some FXF next month.

I did not renew the options positions I've recently had around FXA and FXC.  I'd rather just watch them while the euro's pending self-destruction forces the U.S. dollar higher and plays havoc with other primary trading currencies.