Trade Alert: After Gold
A bullish options trade on a much less liquid precious metal that could go parabolic.
Why We’re Swinging Big Today
Same philosophy: uncapped upside with defined risk so we can swing for the fences.
Precious-metals tail risk, on purpose
A sharp rally in gold and silver has us looking one step further down the liquidity ladder. As our friend David Janello, PhD, CFA argues, when capital chases the shiny stuff, it can spill into a far less liquid precious metal—and if/when it does, the move can be violent.
That asymmetric backdrop is exactly why we’re using an uncapped call leg financed by a small put floor: keep the downside bounded, leave the top open (We’re using a different instrument and approach than Dr. Janello here, one more suitable for smaller accounts and less active traders).
Why now
Macro bid under the metals complex; breadth widening.
If attention rotates into the thinner market, price can gap in chunks, not steps.
Our structure harvests near-term IV while keeping the long tail alive.
Playbook:
Uncapped calls for the tail.
Tight, defined put floor to finance and cap risk.
Pre-wired exits orders so we don’t have to babysit the trades. I’ve made a slight adjustment to our exit approach on the calls, one which should help us capture more upside should the underlying names here go parabolic.
Full details below.
Today’s Precious Metals Trade
The stock is Sibanye Stillwater (SBSW 0.00%↑), and our trade is a combo consisting of these three legs:
Buying the $12 strike calls expiring on April 17th, 2026,
Selling the $10 strike puts expiring on November 21st, 2025, and
Buying the $8 strike puts expiring on November 21st, 2025,
For a net debit of $1.85. The max gain on 2 contracts is uncapped, the max loss is $770, and the break even is with SBSW at $11.48. This trade filled at $1.85.
Exiting This Trade
My plan:
SBSW Calls (leg 1): Open a GTC order to sell half the calls at $6.40; ~30 days before expiration, I will enter a GTC limit order to sell the remaining calls informed by the ATM straddle at that time. I will leave a comment on this post then, indicating my new limit order.
SBSW Put Spread (legs 2 & 3): Open a GTC order to exit at a net debit of $0.15, and raise that price, if necessary, as we approach expiration.
Out of half of the SBSW put spread today at a net debit of $0.15.
When I wrote this post last night, I included a follow up trade on TWST, but that stock shot up 16% today, nixing that idea.