GOLD Stocks 3x etfs : NUGT and DUST

[drbubb]

NUGT - Challenging the Big Two-Five-Two - ie 252d-MA - that's the One Year Moving Ave.

 

NUGT - update : 6-months

 

 

CHART : with the Ratio between NUGT and GDX - has broken the downtrend

 

 

Last closes (NUGT-$43.82 / GDX-$25.95 = Ratio : 1.689)

Given the 3X ratio, this means:

Each GDX move of $0.10

............... : x3 x1.689

= NUGT move of $0.5067

[drbubb]

Extreme VOLATILITY of NUGT Calls

Here's an example:

NUGT- Jan.$40C ... update

 

If three months to come, UP from the Low ($XX), how far might it go ??

[drbubb]

Wed. 9:40pm .. current Nugt Target: $53
GDX : = NUGT :
26.80 = 47.90 > J$50C : 9.10-9.80: $9.45 > order: $11.50
Expected:
ATM call, Jan. : $48.00 x 22.9%= $10.99
Est.Ja.$50 C : $ 9.90 ?? (actual: $9.45)
If Nugt hits : $53.00...
ATM call, Jan. : $53.00 x 22.9%= $12.14
Est.Ja.$50 C : $13.60 ??, try $13.00
Est.Ja.$55 C : $11.10 ??, try $10.60
==========

[drbubb]

Look at the leverage...

 

A Good day for Gold shares

 

Look how the Gains widened as you move to more "leveraged" instruments:

 

Sym. : Wed.- : $ chg : % chg. / volume : TradeValue : comment

GLD : 127.84 +0.77 : +0.61% / 8.32 M : $ 00.0M

GDX : $27.15 +0.69 : +2.61% / 41.97M: $ 00.0M - high volume

Gdxj : $45.03 +2.31 : +5.41% / 10.38M: $ 00.0M

Nugt : $49.71 +3.53 : +7.64% / 05.36M: $ 00.0M

J$40 : $15.40 +3.70 : +31.6% / 40 cts-: $

====

NUGT vs GDX ... update

Date----- : --GDX- : % chg.- : -Nugt- : % chg.-- : -Ratio- : % chg.-- : Vs.Chg.

12/31/13 : $21.13 : ----------: $27.41 : ----------- : 129.7% : ---------- :

03/14/14 : $27.73 : +31.2% : $57.61 : +110.2% : 207.8% : +60.1% : 1.93 :

05/28/14 : $22.04 : - 20.5% : $27.40 : - 052.4% : 124.3% : -40.2% : 1.96 :

07/09/14 : $27.15 : +23.2% : $49.71 : +083.1% : 183.1% : +47.3% : 2.04 :

Jan.$40-Call on NUGT : $15.40 +3.70 : +31.6% ( a bit exaggerated : +$3.00 +xx% ?)

You could have made 4X your money in about 6 weeks Buying these calls !

[Member100]

I wish I had bought some of these NUGT calls.

 

It seems too late now.

[drbubb]

Maybe not too late.

But I would wait for a pullback, and a nice base formation.

But you need to be careful !!,

Because NUGT can lose value rapidly in comparison with GDX,

in a choppy or downwards market.

[drbubb]

I am glad I looked at these figures.

But they do not tell a very good story - the shortfall below "Expected" levels is huge.

And it points out a genuine big risk in Holding NUGT in sideways-to-down markets.

NUGT LOSS of Hedge Efficiency - Starting From Sep. 2013

=====================

End-Year : -GDX- : -NUGT-: -GLD- : UGLD- / GDX-chg. : change x2 : Exp. TBT : act/Exp : Discount

Dec.2010 : $61.47 : $39.20 : 138.72 : = NA= /

======= : ==x50> : 1960.0 :

Jun. 2011 : $54.59 : $29.62 : 146.00 : = NA= / + 00.00%:

======= : ==x50> : $978.5 :

Dec.2011 : $51.43 : $19.57 : 151.99 : $38.64 / +00.00%:

======= : ==x50> : $978.5 :

Jun. 2012 : $44.77 : $10.92 : 155.19 : $38.13 / +00.00%:

======= : ==x50> : $546.0 : ======: ===== /

Dec. 2012 : $46.39 : $10.97 : 162.02 : $41.86 > +00.00%:

======= : ==x50> : $548.5 : ======: ===== /

Mar.2013 : $37.85 : $ 05.62 : 154.47 : $35.59 / +54.55%:

======= : ==x50> : $281.0 : ======: ===== / +54.55%: +163.7% : 132.5 : 212.1% : +112.1%/-6=-18.7%

Jun. 2013 : $24.49 : $58.60*: 119.11 : $15.00 / -02.11%: - 06.35% : 47.07 : 124.5 % : + 24.50%/-3=-8.17%

 

End-Year : -GDX- : -NUGT-: - GLD- : UGLD- / GDX-chg : chg x3: ExpNug: Act/Exp. : Discount : PerMonth

Sep.2013>$25.02 : $50.26 : 128.18 : $17.90 / +00.00% : +00.00% : 50.26 : 100.0 % : + 00.00% : ( START )

Dec.2013 : $21.13 : $27.41 : 116.12 : $12.86 / - 15.54%: - 46.64% : 26.82 :102.12% : +02.12%/03=+0.71%

Jan 2014 : $23.48 : $36.53 : 120.09 : $14.10 / - 06.16%: - 18.47% : 40.98 : 88.73 % : - 11.27%/06= -1.88%

Feb.2014 : $25.88 : $47.41 : 127.62 : $16.87 / +03.44%: +10.31% : 55.44 : 85.52 % : - 14.48%/07= -2.07%

Mar 2014 : $23.61 : $34.65 : 123.61 : $15.26 / - 09.97%: - 19.94% : 40.24 : 86.11% : - 13.89%/08= -1.74%

Apr. 2014 : $24.11 : $36.39 : 124.22 : $15.45 / - 03.64%: - 10.91% : 44.78 : 81.26% : - 18.74%/09= -2.08%

May 2014 : $22.50 : $29.02 : 120.43 : $13.97 / - 10.07%: - 30.22% : 35.07 : 82.75% : - 17.25%/10= -1.73%

Jun. 2014 : $26.45 : $46.24 : 128.04 : $16.73 / +05.72 %: +17.15% : 58.88 : 78.53% : - 21.47% /11= -1.95%

========

End-Year : -GDX- : -NUGT-: - GLD- : UGLD- / GDX-chg : chg x3 : ExpNug: Act/Exp. : Discount : PerMonth

[drbubb]

NUGT does "better than expected" when GDX rises fast

 

27.73 > 27.15 = -2%

21.13 > 27.73 = +31.24%*3 = 93.72

27.41 > 57.61 = +110.18%

===========>+ 93.72%

===========>+16.46% BETTER than Expected !

 

22.04 > 27.15 = +23.19%*3 = 69.57

27.40 > 49.71 = + 81.42%

===========>+ 69.57%

===========>+11.85% BETTER than Expected !

 

 

But a Big Drop in NUGT WIPES OUT so much value, that even "better than expected" subsequent

result on individual legs, leaves NUGT equity seriously impaired.

 

Putting this in terms of Maths: in a sliding market, the Ratio of NUGT-to-GDX gets depressed so

fast that, even if the rally is more than "expected", the rally comes from too low a base to fully recover

the lost ground.

 

==: -GDX- : -NUGT : Ratio : chg in R

A : $21.13 : $27.41 : 1.297 : ======

B : $27.73 : $57.61 : 2.078 : +60.18%

C : $22.04 : $27.40 : 1.243 : -40.18% : Higher Low in GDX, but lower Ratio !

D : $27.15 : $49.71 : 1.831 : +47.30%

B -> D

N($57.41 > $49.71 : -13.41%) / G($27.73 > $27.15 : - 2.09%) x3= - 6.27% / short: -7.14%

B -> C

N($57.41 > $27.40 : -52.27%) / G($27.73 > $22.04 : -20.52%) x3= -61.55% / extra: 9.28%

C -> D

N($27.40 > $49.71 : +81.42%) / G($22.04 > $27.15 : +23.19%) x3= +69.57% / extra: 11.85%

[drbubb]

NUGT Hedging strategy for July-August 2014

 

= https://www.youtube.com/watch?v=0Se7xIJDTXQ =

Published on 7 Jul 2014

Please read the Seeking Alpha article first - http://seekingalpha.com/article/23028...

Summary

• NUGT is not a suitable buy and hold vehicle.
• Further gains are very possible, but risky. Take a look at my recommended hedging strategy.
• The next best chance for a drastic increase in gold prices will come in early 2015.

Thesis: The Direxion Daily Gold Miner Bull 3x Shares (NUGT) is not a suitable buy and hold vehicle for the long-term gold investor. NUGT has crossed over its 200-day SMA, historically a negative indicator. Despite the recent surge in share price, further gains are very possible but risky. The next best chance for a drastic rise in gold prices, in my opinion, will come in early 2015.

Hedging strategy for your NUGT investment using options or a stop loss.

[drbubb]

The Bigger SWINGS over the last three years of GDX / NUGT trading ... update

 

 

==== : ---Date-- : -GDX- : -NUGT: -x 50* : Ratio / Ratio : - GLD - : - UGL- : -Ratio-

Peak : 09.08.11 : $66.63 : $43.22: 2,161 : 32.43 / 2.729: 181.81 : 116.76 : 64.22%

A----- : 06.18.12 : $39.34 : $07.91: 395.5 : 10.05 / 3.806: 149.74 : $74.90 : 50.02%

B----- : 09.10.12 : $54.81 : $18.96: 948.0 : 17.30 / 3.137: 171.96 : $97.04 : 56.43%

C1 -- : 06.26.13 : $22.22 : $04.55: 45.50 : 2.048 / 5.323: 118.28 : $44.02 : 37.15%

Cx -- : 08.26.13 : $30.14 : $97.52: =====: 3.236 / 4.494: 135.45 : $57.06 : 42.13%

C2 -- : 12.31.13 : $21.03 : $27.02: =====: 1.285 / 5.521: 116.10 : $41.22 : 35.50%

============

SWINGS !

P -> c2

N($2161 > $27.02 : -98.75%) / G($66.63 > $27.02 : -59.45%) x3= -178.3% / extra: 79.55%

P -> A

N($2161 > 395.5 : -81.70%) / G($66.63 > $39.34 : -40.96%) x3= -122.9% / extra: 41.20%

A -> B

N( 395.5 > 948.0 : +139.7%) / G($39.34 > $54.81 : +39.32%) x3= +118.0% / extra: 21.70%

B -> C2

N( 948.0 > $27.02 : -97.15%) / G($54.81 > $21.03 : -61.63%) x3= -184.9% / extra: 87.75%

B -> C1

N( 948.0 > $45.50 : -95.20%) / G($54.81 > $22.22 : -59.46%) x3= -178.4% / extra: 83.20%

C1 -> Cx

N( 45.50 > $97.52 : +114.3%) / G($22.22 > $30.14 : -35.64%) x3= +106.9% / extra: = 7.40%

Cx -> C2

N( 97.52 > $27.02 : -72.29%) / G($30.14 > $21.03 : -30.23%) x3= -90.68% / extra: 18.39%

[drbubb]

I Bought some of these yesterday at $11.00

 

NUGT Jan.$40-calls ... update
http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=NUGTA17154400000&uf=0&type=2&size=3&sid=13143613&style=320&freq=1&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=8&rand=2004476757&compidx=aaaaa%3a0&ma=4&maval=21,%2076,%20144,%208&lf=268435456&lf2=0&lf3=0&height=510&width=720&mocktick=1
:

 

I bought them to cover the Jan.$55 calls I sold at $10.90 about two weeks ago,

[drbubb]

IMPLIED VOLs - After the Fall (in July), versus Late June

RAW price data

Day: -TLT--: -Chg- : --Pct-- : --Vol.-- : --TBT--: -Chg- : --Pct.-- : --Vol.-- : Cum'l % / J$60-C : Cum'l % : -NUGT : J$40-C : Cum'l % : Ds>J.15
Jun
29 : 113.24 : ==================: $61.13 : ===================: $ 60.72 - / $4.10 :
30 : 113.52 +0.28 : +0.25% : 5.59M : $60.72 : - 0.39 : - 0.64% : 2.93M : ======= / $ 4.10 : ======= : $46.24 : $13.25 : ======= : 200
Jul
24 : 114.32 - 0.86 : - 0.75% : 6.52M : $59.39 : +0.84 : +1.43% : 2.46M : - 02.05% / $ 3.17 : - 22.68% : $43.55 : $10.70 : -19.25% : 176
25 : 115.67 +1.35 : +1.18% : 6.87M : $58.06 : - 1.33 : - 2.24% : 3.13M : - 04.24% / $ 2.67 : - 34.88% : $47.16 : $12.50 : -05.66% : 175

======================

 

ATM estimates:

(TBT)

Jun 30 : $60C : $60.72 : $4.10 - $0.36 = $3.64 : 5.99% /SR(200/365:0.548):0.740 =8.09/.4 = 20.23%
July 25 : $60C : $58.06 : $2.67 + $0.97 = $3.64 : 6.27% /SR(175/365:0.479):0.692 =9.06/.4 = 22.65%
July 25 : $58C : $58.06 : $3.45 - $0.03 = $3.42 : 5.89% /SR(175/365:0.479):0.692 =8.51/.4 = 21.28%
(NUGT)
Jun 30 : $40C : $46.24 : 13.25 - $3.12 = 10.13 : 21.9% /SR(200/365:0.548):0.740 = 29.6/.4 = 74.0 %
July 25 : $40C : $47.16 : 12.50 - $3.58 = $8.92 : 18.9% /SR(175/365:0.479):0.692 = 27.3/.4 = 68.3 %
July 25 : $45C : $47.16 : $9.60 - $1.08 = $8.52 : 18.1% /SR(175/365:0.479):0.692 = 26.1/.4 = 65.3 %
July 25 : $50C : $47.16 : $8.85 + $1.42 = 10.27 : 21.8% /SR(175/365:0.479):0.692 = 31.5/.4 = 78.7 %
July 25 : $55C : $47.16 : $6.95 + $3.92 = 10.87 : 23.0% /SR(175/365:0.479):0.692 = 33.2/.4 = 83.1 %

 

Time Decay & Arbitrage

(Tm-DK)
Jun 30 : $40C : $46.24 : 13.25 - 6.24 = $7.01 / 200 d = 3.51 cents/day
July 25 : $40C : $47.16 : 12.50 - 7.16 = $5.34 / 175 d = 3.05 ct/d.
July 25 : $55C : $47.16 : $6.95 - 0.00 = $6.95 / 175 d = 3.97 ct/d.

Mid-Pr. : strike : $47.16 : ITM = TmVal / 175 d : Adj = ATM : Pct : (175/365:0.479) ---- : impVol.%
July 25 : $40C : 12.05 - 7.16 = $4.89 = 2.79 ct - 3.58= $8.47: 17.96 / 0.692 = 25.95/.4 = 64.88%
July 25 : $45C : $9.60 - 2.16 = $7.44 = 4.25 ct - 1.08= $8.52: 18.07 / 0.692 = 26.11/.4 = 65.27%
July 25 : $50C : $8.85 - 0.00 = $8.85 = 5.05 ct + 2.42= 11.27: 23.90 / 0.692 = 34.53/.4 = 86.33%
July 25 : $55C : $6.95 - 0.00 = $6.95 = 3.97 ct + 4.92= 11.87: 25.17 / 0.692 = 36.37/.4 = 90.93%

 

Strategy: ----------- : Mid-Pr. : $-Value :

Buy : 10x J'15-40c : $12.05 : $12,050 :

Sell : 15x J'13-55c : $06.95 : $10,425 :

============== : $05.10 : $01,625 :

 

 

Upside-breakeven, & Time decay for Spread strategies

10-11

B/ev.: 10 (X-40) = 11 (X-55) :: 1X - 605 = 400 : 1X = 205 : $205. Strike

Time Decay

At $47.16, 175 days:

B : 10 x ($1205 - $716): $04,890 / 175 = $ 27.94

S : 11 x ($0695 - $000): $07,645 / 175 = $ 43.69

========================== / Net = $ 15.75

$5,100 cost / $15.75 = 324 days

10-15

B/ev.: 10 (X-40) = 15 (X-55) :: 5X - 825 = 400 : 5X = 425 : $85.0 Strike

Time Decay

At $47.16, 175 days:

B : 10 x ($1205 - $716): $04,890 / 175 = $ 27.94

S : 15 x ($0695 - $000): $10,424 / 175 = $ 59.57

========================== / Net = $ 31.63

$1,625 cost / $31.63 = 51 days

10-17

B/ev.: 10 (X-40) = 17 (X-55) :: 7X - 935 = 400 : 7X = 535 : $76.4 Strike

Time Decay

At $47.16, 175 days:

B : 10 x ($1205 - $716): $04,890 / 175 = $ 27.94

S : 17 x ($0695 - $000): $11,815 / 175 = $ 67.51

========================== / Net = $ 39.57

$0,235 cost / $39.54 = 5.9 days

 

[drbubb]

NUGT - Jan.$40c : update : 10d-Intraday

 

Dte : -NUGT : + Chg. : Int.Val : +TmVal = J$40-C : Cum'l- % : + Chg.- :

Jn30 $46.24-------------$06.24 : $07.01-> $13.25 : + 00.00%

JUL

23 :: $45.72 : -$0.58 : $07.16 : $05.54 = $12.70 : - 04.15% : -$0.40 :

24 :: $43.55 : -$2.17 : $03.55 : $07.15 = $10.70 : - 19.25% : -$2.00 :

25 :: $47.16 : +$3.61 : $07.16 : $06.34 = $12.50 : - 05.66% : +$1.80 :

28 :: $48.01 : +$0.85 : $08.01 : $05.84 = $13.85 : + 04.53% : +$1.35 :

29 :: $46.93 : -$1.08 : $06.93 : $06.42 = $13.35 : + 00.75% : -$0.50 :

30 :: $45.43 : -$1.50 : $05.43 : $06.87 = $12.30 : - 07.17% : -$1.05 :

31 :: $42.70 : -$2.73 : $02.70 : $07.10 = $09.80 : - 26.04% : -$2.50 :

AUG

01 :: $43.81 : +$1.11 : $03.81 : $06.49 = $10.30 : - 22.26% : +$0.50 :

04 :: $42.63 : -$1.19 : $02.63 : $06.97 = $09.60 : - 27.55% : -$0.70 :

05 :: $43.32 : +$0.59 : $03.32 : $06.68 = $10.00 : - 24.53% : +$0.40 :

06 :: $46.26 : +$3.06 : $06.26 : $06.14 = $12.40 : - 06.42% : +$2.40 :

07 :: $46.56 : +$0.30 : $06.56 : $06.24 = $12.80 : - 03.40% : +$0.40 :

Dte : -NUGT : + Chg. : Int.Val : +TmVal = J$40-C : Cum'l- % : + Chg.- :

[drbubb]

NUGT - 3X Bull etf on GDX/Gold miners ... update : 12-mos

 

 

GDX / Gold Miners etf ... update

 

[drbubb]

TAKING Some PROFITS today

 

Have sold NUGT. Jan.$25c at average of $26.55 today (Cost, a bit over $8.)

 

TO BUY:

Silver-2X : AGQ. Jan.$60c at about $8.10

 

Sentiment on GDX is too strong at 90% Bulls !

 

Hulbert Sentiment:
GDX : 90% Bull - 4.2K / v.0.70x : 90% is maybe dangerously high (?)
Nugt : Mod. Bull - 1.1K / v.1.17x
GLD : Neutral --- 13.K / v.1.17x
SLV. : Neutral --- 7.4K / v.1.05x
AGQ : Neutral ---- 976 / v.1.03x

SIL . : Neutral ---- 916 / v.0.14x
=====

 

==== : Net : %Bulls*= Up: Dn: N = Surveyed: FriGold > NextWk: Chg.
07/11 : +11 : 68.0% = +17, - 06, N 2 = 25 /37 : $1340.0 > 1311.4 : - 2.13%
07/18 : +02 : 44.0% = +11, - 09, N 5 = 25 /37 : $1,311.4 > 1308.3 : - 0.24%
07/25 : -10 : 18.2% = +04, - 14, N 4 = 22 /37 : $1,308.3 > 1295.2 : - 1.00%
08/01 : -04 : 33.3% = +08, - 12, N 4 = 24 /37 : $1,295.2 > 1310.6 : +1.16%
08/08 : +12 : 66.7% = +18, - 06, N 3 = 27 /37 : $1,310.6 > ? ?
=====

[drbubb]

TAKING Some Nice fat PROFITS today

 

Have sold NUGT. Jan.$25c at average of $26.55 today (Cost, a bit over $8: $8.40?)

 

(If $26.55 / $8.40, that's a +216 % profit !)

 

TO BUY:

Silver-2X : AGQ. Jan.$60c at about $8.15 (some at $8.20, some at $8.00)

 

Sentiment on GDX is too strong at 90% Bulls !

 

=

An odd Gap: GDX (Gold stocks) versus AGQ (2X Bull on Silver) ... update : 6mos :

 

 

A genuine opportunity perhaps?

I bought Jan. 2015 calls on AGQ - to go "long" silver, and "play" this arbitrage.

=

Basically,

I have SOLD 10x Jan.$25c : controlling a position worth $51.00 x 1,000 x3 = $153,000 of GDX (taking $26,550 off the table)

. . .

To BUY 35x Jan.$60c : controlling a position worth $63.50 x 3,500 x 2 = $444,500 of SLV (costing an options premium of $28,525)

. . .

The FACE Value of my position is now 3X greater, and based on today's prices:

Long: SLV : $19.16 / GDX : $27.60 : 69.4% - If this ratio moves higher, I am winning on the trade

[drbubb]

Buying Window on NUGT yesterday maybe (?) ... NUGT-chart : GDX-chart

Mon. close: $40.85 / GDX: close: $25.62 / Ratio: 1.594