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SK OptionTrader Past Updates and Signals This section contains a complete copy of all SK OptionTrader market updates and

trading signals up to the end of 2011.

23 December 2011
SK OptionTrader Update: Holding All Positions Over Christmas

Current Position: Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Feb 18 '12 $155/$150 Vertical Put Spread @ $1.35 (10% Allocated). Opened 12th December 2011. Short GLD Feb 18 '12 $155/$150 Vertical Put Spread @ $2.15 (10% Allocated). Opened 15th December 2011. This leaves 70% of our model portfolio in cash.

This is just a brief note to confirm that we intend to hold all our current positions over Christmas. We expect gold prices to remain contained during this time and therefore are content to remain as we are for now. Whilst we will of course be monitoring the markets over the Christmas period, we may not be able to reply to subscriber enquires during this time. We will however be back to full operation again by the 28th December. We would like to take this opportunity to wish all readers a merry Christmas and happy new year.

Regards,

SK Options Trading www.skoptionstrading.com

17 December 2011
SK OptionTrader Update: Gold Most Oversold Since 2008

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Feb 18 '12 $155/$150 Vertical Put Spread @ $1.35 (10% Allocated). Opened 12th December 2011. Short GLD Feb 18 '12 $155/$150 Vertical Put Spread @ $2.15 (10% Allocated). Opened 15th December 2011. This leaves 60% of our model portfolio in cash.

Gold prices have endured a substantial sell off in recent trading, breaking multiple support levels and key moving averages. Although we are of course taking a fair beating in the market, we are pleased that we recently had dramatically cut our gold exposure. Effectively we had 80% in cash recently (since our Short GLD Dec 17 11 $145/$140 Vertical Put Spread position expires this Friday and therefore is really a dead trade, however, a profitable one that should return 22.6%) for which we are thankful. Many of the technical indicators that we use for gold have not been this oversold since 2008. An asset being oversold is not by itself a reason to buy; one has to consider the fundamentals too. We do not think a great deal has changed fundamentally. The Fed has ruled out any QE3 for a while and the ECB will not be printing money on a grand scale without permission from a new treaty, these are the main changes that have caused golds decline. However the easing of monetary policy has not been cancelled, it has merely been delayed. Gold therefore remains an attractive currency to be in over the coming months and maybe years. We do not think this is the end of the bull market. A crucial part of our analysis that has led us to this conclusion is the current level of US real interest rates. We view US real interest rates as a key determinant of gold prices over the medium term and the two have an inverse relationship which we have covered many times before. For our recent coverage of this topic please view the following article: http://www.skoptionstrading.com/updates/2011/12/13/us-real-interest-rates-indicate-goldslightly-undervalued.html If US real interest rates have been rising as gold had fallen, then we would be questioning the validity of the bull market and would not be open to increase our exposure to gold. At the beginning of this month US 10 year TIPS were trading at +6bps, whereas now they are trading at -4bps. In short, US real interest rates are still indicating looser monetary policy in the future and therefore we can imply that there is a strong chance that gold prices will be substantially higher going forward. We therefore looked to take advantage of this opportunity. Of course there is a chance that the relationship between US real interest rates and gold no longer holds or that the disparity between the two could grow wider. There is also the possibility that we enter a 2008 style liquidation mode where anything with a bid gets sold. However, we thought it was still worth increasing our long exposure to gold at this point, even though we may not be risking a massive amount of our portfolio in these trades. Reviewing our current open trades, we intend to hold our short GLD Jan 21 12 $165/$160 vertical put spread for now. However the risk-reward dynamics of the trade have shifted slightly against us with the strikes moving ITM. Therefore we will look to close the trade into strength over the coming weeks and it is unlikely that we will hold the position until expiration. We still expect this trade to be profitable.

Our short GLD Dec 17 11 $145/$140 vertical put spread expires at the end of this week and we intend to hold this trade until expiration. We expect this trade to expire worthless and therefore we will get to keep our $1.13 net credit and bank a 22.6% return on this trade. We recently sold Feb 18 '12 $155/$150 vertical put spreads at $1.35 based on the view that the downside in gold was limited. Gold prices then fell and therefore we are sitting on a paper loss on this trade at present. Nonetheless we are confident that this trade will recover and be profitable. After all gold prices only need to recover back to the 200 day simple moving average by February for us to bank the maximum profit on this position. It was for this reason that we doubled our position in this particular trade, since we feel the risk-reward dynamics were very attractive. We sold the spread at $2.15 in the last session. Given that this trade is a $5.00 spread, this implies that one can almost double ones money speculating that gold prices will return to $1600+ by February 2012. We still remain reluctant to take a position on the US stock market. Our technical indicators for the S&P are neutral and in the options market risk appears to be fairly priced. What we mean by this is that there are currently no trading opportunities where we could really say that the risk-reward dynamics were skewed in our favour. Therefore we will opt to keep our powder dry in this area for now. We appear to have missed our opportunity to sell call spreads on GDX. We will watch and wait for another opportunity to place this trade.

Regards,

SK Options Trading www.skoptionstrading.com

16 December 2011
SK OptionTrader Trading Signal: Sell GLD Feb 18 '12 $155/$150 Vertical Put Spread @ $2.15 (10% Allocated)

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Feb 18 '12 $155/$150 Vertical Put Spread @ $1.35 (10% Allocated). Opened 12th December 2011. Short GLD Feb 18 '12 $155/$150 Vertical Put Spread @ $2.15 (10% Allocated). Opened 15th December 2011.

This leaves 60% of our model portfolio in cash.

We hereby signal to sell GLD Feb 18 '12 $155/$150 vertical put spreads at $2.15 with 10% of our capital allocated to this trade. For those who are unfamiliar with how this trade works, we offer this brief explanation. In this trade we are selling the $155 puts and buying the $150 puts at the same time, resulting in a net credit of $2.15 (since the $155 puts trade at a higher price than the $150 puts). We buy/sell an equal number of options in both legs. The trade will be profitable should GLD trade higher than $155 and the longer it remains there the more profitable it will be. The trade has positive delta; it increases in value with an increase in the price of gold. We would recommend that subscribers wishing to place this trade use a limit order to execute the trade as opposed to a market order. Even if the limit price one specifies is at the market price, it is worth doing a limit order as it removes the risk that you get some bad luck and bids/offers are pulled for a second or two and one ends up getting a very poor price. Further explanation on bullish vertical put spreads of trades can be found here: http://www.skoptionstrading.com/updates/2011/9/24/sk-options-trading-explains-bullish-verticalput-credit-spre.html

Regards,

SK Options Trading www.skoptionstrading.com

13 December 2011
SK OptionTrader Update: Our Trading Strategy For Gold

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Feb 18 '12 $155/$150 Vertical Put Spread @ $1.35 Net Credit (10% Allocated). Opened 12th December 2011. This leaves 70% of our model portfolio in cash.

Before we get on to what our trading strategy is for the next few weeks, we will take a moment to comment on recently closed trades. We have just banked a 22.6% return on our short GLD Dec 17 11 $165/$160 Vertical Put Spread trade, closing it at $0.74 having sold the spread for $1.87. Shortly after our signal, gold prices increased and many subscribers closed the spread at $0.70 or less. This should not be misunderstood so we will clarify its impact on the profitability of the trade. Closing the spread at a lower price is better for the trader, since we are buying the position back. Having sold the spread at $1.87 we would like to buy it back at as a low of a price as possible, so if one was able to get a lower (and therefore better price) than $0.74 then well done. Although we thought the spread will most probably expire worthless, we no longer felt the risk-reward dynamics were skewed in our favour so we opted to close the trade. December gold futures dropped down to $1705 in the next trading session after our spread had been closed and have been even lower since. Therefore we are confident that we made the right decision in closing the trade and taking our profits, even if it turns out that we could have made a higher return by holding the trade for longer, in our opinion this potential extra reward did not compensate for the additional risk. Keep in mind that gold trading anywhere below approximately $1680 on December 17th would have seen us incur losses. Our decision to sell our GLD Mar 17 '12 $210 calls was mainly prompted by comments from ECB head Draghi. Comments such as lending money to IMF to buy Euro bonds is not compatible with the treaty and emphasis that the ECBs primary remit is price stability, indicates that talk of quantitative easing in Europe appears to be off the table in the short term. Therefore whilst we still view the downside in gold as limited, the upside over the short term is now looking also more contained. Therefore we thought it was prudent to cut our losses on these call options and sell them whilst they still had some value, since soon the battle against Theta would have become unwinnable. Having sold these calls at $0.85 we have taken a big loss on this trade and with 10% of our model portfolio invested we have taken a significant hit. Whilst these type of trades can bring great rewards when they successful, this was a clear cut case of them not being successful and we paid the price. With regard to our current trades, we intend to hold our short GLD Jan 21 12 $165/$160 vertical put spread. This trade should increase in value in the coming weeks if gold prices remain well supported. Our short GLD Dec 17 11 $145/$140 vertical put spread expires at the end of this week and we intend to hold this trade until expiration. We expect this trade to expire worthless and therefore we will get to keep our $1.13 net credit and bank a 22.6% return on this trade. Looking forward we think gold prices will remain contained until early 2012, barring any significant event, and therefore we are looking to sell OTM GLD Jan-12 and Feb-12 vertical put spreads should an attractive opportunity present itself. In short this trade is expressing the view that gold price will

remain well supported but lack the fuel to stage a serious rally in the near term. However should gold produce a surprise to the upside then we would not incur losses, we would merely have missed the larger profits that could have been achieved using another more aggressive options trading strategy. We began implementing the strategy in the last trading session, selling GLD Feb 18 '12 $155/$150 vertical put spreads for a $1.35 net credit with 10% of our capital allocated to this trade. We will be looking to place additional similar trades should gold prices weaken further. We are also looking at selling OTM GDX Jan-12 vertical call spreads if the market presents an attractive opportunity. GDX is a gold miners ETF and if gold prices are to be contained, then it follows that the miners would be too. The view expressed by this trade is that gold mining stocks will struggle to rally over the Christmas period. If there was to be a shock event over the Christmas period (such as the Japanese earthquake and tsunami in March 2011) then we would not incur losses since this trade would benefit from a fall in the stock price of gold mining companies as well as benefiting from GDX simply moving sideways. We remain reluctant to take a position on the US stock market. Our technical indicators for the S&P are neutral and in the options market risk appears to be fairly priced. What we mean by this is that there are currently no trading opportunities where we could really say that the risk-reward dynamics were skewed in our favour. Therefore we will opt to keep our powder dry in this area for now.

Regards,

SK Options Trading www.skoptionstrading.com

13 December 2011
SK OptionTrader Trading Signal: Sell GLD Feb 18 '12 $155/$150 Vertical Put Spread @ $1.35 (10% Allocated)

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Feb 18 '12 $155/$150 Vertical Put Spread @ $1.35 (10% Allocated). Opened 12th December 2011. This leaves 70% of our model portfolio in cash.

We hereby signal to sell GLD Feb 18 '12 $155/$150 vertical put spreads @ $1.35 with 10% of our capital allocated to this trade. For those who are unfamiliar with how this trade works, we offer this brief explanation. In this trade we are selling the $155 puts and buying the $150 puts at the same time, resulting in a net credit of $1.35 (since the $155 puts trade at a higher price than the $150 puts). We buy/sell an equal number of options in both legs. The trade will be profitable should GLD trade higher than $155 and the longer it remains there the more profitable it will be. The trade has positive delta; it increases in value with an increase in the price of gold. This trade has positive theta; it increases in value as time passes. For every contract in the spread we are risking $500, since the spread is $5 wide and there are 100 shares deliverable under each put option. Therefore selling/buying 10 put options in each leg of this trade would allocate $5000 to this trade under the rules of our model portfolio. We would recommend that subscribers wishing to place this trade use a limit order to execute the trade as opposed to a market order. Even if the limit price one specifies is at the market price, it is worth doing a limit order as it removes the risk that you get some bad luck and bids/offers are pulled for a second or two and one ends up getting a very poor price. Further explanation on bullish vertical put spreads of trades can be found here: http://www.skoptionstrading.com/updates/2011/9/24/sk-options-trading-explains-bullish-verticalput-credit-spre.html

Regards,

SK Options Trading www.skoptionstrading.com

9 December 2011
SK OptionTrader Trading Signal: Sell GLD Mar 17 '12 $210 Calls @ $0.85

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Sold @ $0.85. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Sold @ $0.85. This leaves 80% of our model portfolio in cash.

We hereby signal to sell our GLD Mar 17 '12 $210 Calls @ $0.85. Our decision to sell our GLD Mar 17 '12 $210 calls has been prompted by recent ECB comments. Comments by Draghi such as lending money to IMF to buy Euro bonds is not compatible with the treaty and emphasis that the ECBs primary remit is price stability, indicates that talk of quantitative easing in Europe appears to be off the table in the short term. Therefore whilst we still view the downside in gold as limited, the upside over the short term is now looking also more contained. Therefore we think it is prudent to cut our losses on these call options and sell them whilst they still have some value, since soon the battle against Theta will become unwinnable. This trade hasnt worked out as we had hoped, but we do not regret the trade since the risk-reward dynamics at the time were attractive. When these trades work, we can return many times the capital invested. However, they cannot be expected to work every time.

Regards,

SK Options Trading www.skoptionstrading.com

6 December 2011
SK OptionTrader Trading Signal: Close GLD Dec 17 11 $165/$160 Vertical Put Spread @ $0.74

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Dec 17 11 $165/$160 Vertical Put Spread @ $1.87 Net Credit (10% Allocated). Opened 22nd November 2011. Closed @ $0.74. This leaves 70% of our model portfolio in cash. We hereby signal to close our short GLD Dec 17 11 $165/$160 Vertical Put Spread at $0.74. As we noted in recent updates, whilst we are happy to hold the $145/$140 spread until expiration, we may look to close the $165/$160 soon. We have banked a 22.6% return on this trade. Even if we held it to expiration and it expired worthless our maximum return is capped at about 37%. Therefore although we think the spread will most probably expire worthless, we no longer feel the risk-reward dynamics are skewed in our favour so we are opting to close the trade. To close this trade we are buying the higher strike put and selling the low strike put, the reverse of what we did to open the trade. Whilst we got a net credit for placing the trade, we will incur a net debit for closing it. Specifically, we are buying the GLD Dec 17 11 $165 puts and selling the GLD Dec 17 11 $160 puts for a net debit of $0.74 in order to close this position. Further information on how these trades work can be found here: http://www.skoptionstrading.com/updates/2011/9/24/sk-options-trading-explains-bullish-verticalput-credit-spre.html

Regards,

SK Options Trading www.skoptionstrading.com

5 December 2011
SK OptionTrader Update: Golds Correlation With Stocks

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Dec 17 11 $165/$160 Vertical Put Spread @ $1.87 Net Credit (10% Allocated). Opened 22nd November 2011. This leaves 60% of our model portfolio in cash.

Recently gold and the US stock market have been moving together, which has prompted some to question whether gold is still an effective safe haven asset. We firmly believe that gold still is a safe haven asset and have written the following article discussing the issue; Does Golds Correlation with Stocks Mean that its No Longer a Safe Haven? One can read the article by following this link: http://www.skoptionstrading.com/updates/2011/12/4/does-golds-correlation-with-stocks-meanthat-its-no-longer-a.html As we have mentioned previously, we intend to close our short GLD Dec 17 11 $165/$160 vertical put spread once the risk-reward dynamics are not longer skewed in our favour. Depending on market conditions, we could be closing the trade this week. We intend to hold our other positions.

Regards,

SK Options Trading www.skoptionstrading.com

2 December 2011
SK OptionTrader Update: Global Central Bank Easing

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Dec 17 11 $165/$160 Vertical Put Spread @ $1.87 Net Credit (10% Allocated). Opened 22nd November 2011. This leaves 60% of our model portfolio in cash.

The markets got very excited when global central banks announced a co-ordinated 50bps cut on USD swap lines, with stocks rallying, gold prices climbing and commodities also getting a lift most notably copper which gained over 5% on the day. One must keep in mind that this is not a form of QE. All this action has done is decrease the cost of funding to banks. So there has not been an actual injection of liquidity into the system, the cost of the liquidity as just been reduced. Nonetheless the markets have taken this action as a sign of things to come. A recent survey, prior to the recent central bank action regarding USD swap lines, indicated that 80% of bond fund managers expected large scale asset purchases by the Fed in 2012. According to SocGen the Fed will preannounce QE3 in the January 2012 FOMC statement and the monetization will last from March 2012 through to the end of the year, with the Fed injecting a total of $600 billion into the financial markets. We expect a form of QE3 to be delivered in early 2012. The fact that the market is becoming increasingly confident that QE3 will come actually makes QE3 more likely. The Fed actively monitors market expectations and if the market was pricing in a policy shift that they did not intend to make then we would see comments from various Fed members that would cause the market to adjust its expectations accordingly. We therefore still hold the view that the current market environment is supportive of higher gold prices. We will look to increase our exposure on dips in the gold price over the next month. With Christmas and New Year fast approaching, we think selling vertical put spreads continues to be the best way to gain exposure to rising gold prices from a risk-reward perspective. Looking at our current positions, there is just over two weeks until the expiration of our Dec 17 11 vertical put spreads. Whilst we are happy to hold the $145/$140 spread until expiration, we may look to close the $165/$160 soon. The trade is already showing a 20% return (with our total return capped at about 37%) and therefore the risk-reward dynamics will soon cease to work in our favour.

Regards,

SK Options Trading

www.skoptionstrading.com

28 November 2011
SK OptionTrader Update: Which Other Currency Behaves Most Like Gold?

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Dec 17 11 $165/$160 Vertical Put Spread @ $1.87 Net Credit (10% Allocated). Opened 22nd November 2011. This leaves 60% of our model portfolio in cash. We have just published an article entitled Which Other Currency Behaves Most Like Gold?. The article explores how gold has performed relative to other currencies and attempts to identify which other currency pair has been most correlated with gold. The conclusions are that the Japanese Yen and Swiss Franc are the most correlated, which was to be expected given their safe haven status, however the article also explores why gold is superior to JPY and CHF as safe haven currency. To read the article in full, simply click on the following link: http://www.skoptionstrading.com/updates/2011/11/27/which-other-currency-behaves-most-likegold.html Our trading strategy is little changed from last week. We intend to increase our long exposure to gold on pullbacks by selling GLD vertical put spreads. The situation in Europe is far from being resolved and the bond markets share this view. Italian 2 year government bonds are currently trading at around 7.71% with 10 year yields at roughly 7.1%. Whether these yields trade up or down 50bps in a week is somewhat irrelevant in our view, since any yield above 6% means that Italy cannot afford to refinance itself when their outstanding debt matures, even with strong growth and austerity measures. Therefore the pressure grows each day on the ECB to intervene (effectively by printing money to buy sovereign debt) and if they do this will be massively bullish for gold. So we see two possible paths for gold over the coming months. One is that the ECB embarks on their own form of QE, in which case gold rallies sharply to new highs. The other is that Europe continues to be in a state of political deadlock with little or no progress, increasing uncertainty in the financial system and therefore also increasing safe haven demand for gold. We continue to look for opportunities in the equity markets should the S&P500 trade down to 11001050. We are also considering a volatility based trade on silver, should option prices drift low enough that straddles/strangles become attractive. These trades will be explained in greater detail should we move closer to placing them.

Regards,

SK Options Trading www.skoptionstrading.com

24 November 2011

SK OptionTrader Update: Silver & Margin Requirements - How the CME System Increases Volatility

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Dec 17 11 $165/$160 Vertical Put Spread @ $1.87 Net Credit (10% Allocated). Opened 22nd November 2011. This leaves 60% of our model portfolio in cash.

We have voiced our opinion on the way that the CME alters margin requirements on multiple occasions to subscribers, arguing that the discrete manner in which margins are changed leads to more volatility and should be replaced by a continuous margin adjustment system. We have written a full piece detailing what we think the problems with the CME system are and how they should be resolved. For those who are interested in this we have attached the article as a PDF and it can also be found at the following url: http://www.skoptionstrading.com/updates/2011/11/23/silver-margin-requirements-how-the-cmesystem-increases-vola.html On an administrative note, a number of subscribers have been enquiring as to whether we are on Twitter, so to confirm to all subscribers; yes we are on Twitter and can be followed @skoptions. Looking to gold we see strong technical support for the yellow metal at around $1650, with US real interest rates implying that gold should be trading north of $1800, and therefore we favour selling put spreads on weakness. This is what we did in our last trade, selling the GLD Dec 17 11 $165/$160 vertical put spread for $1.87. For those who are unfamiliar with how this trade works, we offer this brief explanation. In this trade we are selling the $165 puts and buying the $160 puts at the same time, resulting in a net credit of $1.87 (since the $165 puts trade at a higher price than the $160 puts). We buy/sell an equal number of options in both legs. The trade will be profitable should GLD move higher than $165 and the longer it remains there the more profitable it will be. The trade has positive delta; it increases in value with an increase in the price of gold. This trade has positive theta; it increases in value as time passes. We would recommend that subscribers wishing to place this trade use a limit order to execute the trade as opposed to a market order. Even if the limit price one specifies is at the market price, it is worth doing a limit order as it removes the risk that you get some bad luck and bids/offers are pulled for a second or two and one ends up getting a very poor price. Further explanation on bullish vertical put spreads of trades can be found here: http://www.skoptionstrading.com/updates/2011/9/24/sk-options-trading-explains-bullish-verticalput-credit-spre.html

Regards,

SK Options Trading www.skoptionstrading.com

23 November 2011
SK OptionTrader Trading Signal: Sell GLD Dec 17 11 $165/$160 Vertical Put Spread @ $1.87 Net Credit (10% Allocated)

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Dec 17 11 $165/$160 Vertical Put Spread @ $1.87 Net Credit (10% Allocated). Opened 22nd November 2011. This leaves 60% of our model portfolio in cash. We hereby signal to sell GLD Dec 17 11 $165/$160 Vertical Put Spread for a $1.87 net credit with 10% of our capital allocated to this trade. This is part of our previously discussed plan to increase our gold exposure.

Regards,

SK Options Trading www.skoptionstrading.com

22 November 2011
SK OptionTrader Update: Looking To Increase Our Gold Exposure

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Nov 19 '11 $150/$149 Vertical Put Spread @ $0.35 Net Credit (10% Allocated). Opened 26th September 2011. Expired for 35% profit 19th November 2011. This leaves 70% of our model portfolio in cash.

Our short GLD vertical spread position (GLD Nov 19 '11 $150/$149) expired out of the money on Friday and we therefore banked a 35% profit on this trade in 54 days. We are now 70% in cash, with a low long exposure to gold that we are actively looking to increase. We see support for gold around $1650 and therefore would like to be buyers of this dip. We intend to increase our exposure this week by selling more vertical put spreads on GLD. Whilst we view the downside in gold as limited, given the current level of uncertainty in the global financial markets we feel that selling vertical put spreads offers the best risk-reward dynamics, as opposed to buying call options. We are content to hold our March 2012 GLD call options however, since we only have 10% allocated to these trades and we still see a strong possibility of a large rally in the coming months.

Regards,

SK Options Trading www.skoptionstrading.com

14 November 2011
SK OptionTrader Update: Letting Our GLD Put Spread Expire

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Closed @ $0.15 Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Closed @ $0.15 Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Nov 19 '11 $150/$149 Vertical Put Spread @ $0.35 Net Credit (10% Allocated). Opened 26th September 2011. This leaves 60% of our model portfolio in cash.

On 26th September 2011 we signalled to sell the GLD Nov 19 '11 $150/$149 Vertical Put Spread for $0.35 Net Credit, with 10% of our model portfolio risked in this trade. Those options are set to expire worthless this week and so we should be able to bank the maximum profit possible on this trade, a 35% return. There is no need to take any action on this position. Although each leg of the trade could be closed, this would incur somewhat unnecessary brokerage costs. If there was more time to go until expiration, we would close the trade simply to remove the downside risk, but since there is only 5 trading days to go we are comfortable holding them until expiration. In this environment we think selling GLD vertical put spreads is still an attractive trade and we are looking to sell more of these spreads should any weakness in gold present itself. In our opinion $1600 gold is a floor that will not be breached any time soon. At currently levels US real interest rates suggest gold should be trading significantly higher than $1800, so we are content to maintain a long bias to gold and we will look to increase this exposure should the opportunity present itself.

Regards,

SK Options Trading www.skoptionstrading.com

11 November 2011
SK OptionTrader Trading Signal: Sell SLV Jan 21 '12 $50 Calls @ $0.15

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Closed @ $0.15 Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Closed @ $0.15 Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Nov 19 '11 $150/$149 Vertical Put Spread @ $0.35 Net Credit (10% Allocated). Opened 26th September 2011. This leaves 60% of our model portfolio in cash.

We have decided to book the loss on our SLV Jan 21 '12 $50 calls, selling our entire remaining position for $0.15. The time decay on these calls now means that even if silver prices could stage an impressive rally, the positive effect of this would likely be cancelled by the Theta. Although we were slightly blindsided by the CME margin hikes, we are not going to blame them for what happened. We were simply wrong on this one. Losses have to be taken from time to time and unfortunately this is one of those times. Regards,

SK Options Trading www.skoptionstrading.com

7 November 2011
SK OptionTrader Update: The Most Bullish Sign For Gold Is Actually Falling Inflation

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Nov 19 '11 $150/$149 Vertical Put Spread @ $0.35 Net Credit (10% Allocated). Opened 26th September 2011. This leaves 50% of our model portfolio in cash.

Our latest commentary covering gold, US real interest rates and the situation in the Eurozone can be read by following this link: http://www.skoptionstrading.com/updates/2011/11/7/the-most-bullish-signfor-gold-falling-inflation.html We will not be executing any trading recommendations via SK OptionTrader on Italian debt at this time, since the relevant ETNs do not have options trading on them and therefore are outside the scope of this service. Nonetheless we still wish to express our view on this market as it may be of value to some subscribers even though SK OptionTrader is focused on US options trading, plus it assists in explaining our global macro view. We intend to hold our current gold positions this week and sell our SLV calls into strength if possible.

Regards,

SK Options Trading www.skoptionstrading.com

1 November 2011
SK OptionTrader Update: Focus on FOMC and NFP This Week

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Nov 19 '11 $150/$149 Vertical Put Spread @ $0.35 Net Credit (10% Allocated). Opened 26th September 2011. This leaves 50% of our model portfolio in cash.

Markets will take a pause from focusing on Europe to examining the situation on the other side of the Atlantic this week, with the FOMC meeting taking place Tuesday-Wednesday and Non-farm payrolls data out on Friday. We do not expect either of these events to be a game changer, but they are nonetheless important to analyse in order to form a longer term view. We do not expect anything radical in the this FOMC statement, given that the Fed has just announced Operation Twist at the last meeting and committed to keeping interest rates low for two years back in August. Therefore the statement will most probably be largely the same as Septembers. The marked improvement in market confidence over the last month adds weight for the Fed to be fairly non-committal this week. Equity and credit markets have rallied and a risk-on tone has been present in the market, to the degree that we have not seen in some months. Therefore the Fed will most likely adopt a wait and see approach. Another sign of this economic strength (or rather a symptom of slightly less economic weakness) is the steepening of the US yield curve in recent weeks. Some may question the yield curve steepening, just a month after the Fed announced Operation Twist, which involves the Fed selling shorter term treasuries and buying longer term treasuries. Although Operation Twists stated aim was to flatten the yield curve, this was only a means to an end, not the end in itself. The ultimate aim is to improve the economic situation. Therefore if the Fed policy is successful the curve should be steepening and longer term interest rates rising. This is what has happened since Operation Twist. A similar scenario unfolded after QE2, although the Fed was buying bonds to keep interest rates low, interest rates began increasing as soon as the fed announced QE2. This is because the market perceived the economy to be improving and therefore sold treasuries in favour of more risky assets, sending yields higher. However the employment situation report on Friday will remind investors that the wait and see approach cannot last for much longer. Unemployment consistently above 9% increases pressure on the Fed to ease. Whilst we are unlikely to see action in the short term, there is a significant chance of the market increasing its expectations for future easing over the coming months. This increase in expectation of Fed easing is bullish for gold and therefore we intend to hold our current positions.

From a technical perspective the next hurdle for gold is still the 50 day moving average, which is currently at $1736. If gold can close above this level then taking out the recent highs really does become an achievable target. Gold was poised to break out through this level towards the end of last week, however intervention by Japan in the currency markets to weaken the Yen caused a strengthening of the US dollar and a slight sell off in gold. Although gold was caught in the cross currents we see this impact as temporary, since the Japanese intervening to weaken the Yen is not a new phenomena and therefore gold should continue to push higher once the short term rebalancing effects have worked themselves out. We will look to exit our remaining SLV trades shortly, aiming to sell into strength.

Regards,

SK Options Trading www.skoptionstrading.com

27 October 2011
SK OptionTrader Update: Change of Tone in Gold Options Market

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Nov 19 '11 $150/$149 Vertical Put Spread @ $0.35 Net Credit (10% Allocated). Opened 26th September 2011. This leaves 50% of our model portfolio in cash.

There has been a significantly different tone in the gold options market this week. Over the past few weeks we have seen call options being offered in rallies and puts being bid during selloffs, which is not a bullish sign. This week however we have seen calls being bid in the rally and puts being offered, which is a bullish sign for gold prices in our opinion. On Tuesday when gold pushed above the $1700 mark for the first time in a month, trading in the options indicated to us that this was not simply a continuation of the consolidation phase, but could well be the start of a significant new rally higher. Call options and straddles were bought heavily that day and this combined with significantly higher futures volume has suggested to us that this move could have some weight behind it. During yesterdays trading session it was more of the same. Gold prices increased and there were plenty of bids for call options, whilst the volatility was higher across the term structure (implied volatilities for gold options were almost 2% higher at the front end of the curve and 1% higher at the back end). Basically these indications lead us to believe that this rally may have some real juice in the tank. Fundamentally we see US real interest rates as the main driver of gold over the medium term. Whilst real yields have been static for a while, they have recently fallen (yields on US 10 year TIPS fallen from 28bps to 12bps, and closed yesterday at 15bps) and so this adds support for higher gold prices from the fundamental side. From a technical perspective the next hurdle for gold is in 50 day moving average, which is currently at $1744. If gold can close above this level then taking out the recent highs really does become an achievable target. We therefore intend to hold our current positions in gold. We see a strong case for silver to rally too and will look to exit our remaining SLV trades shortly, aiming to sell into silvers strength.

Regards,

SK Options Trading www.skoptionstrading.com

25 October 2011
SK OptionTrader Update: Game Theory Reveals Terrible Strategic Thinking in Euroland

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Nov 19 '11 $150/$149 Vertical Put Spread @ $0.35 Net Credit (10% Allocated). Opened 26th September 2011. This leaves 50% of our model portfolio in cash.

We intend to hold our current positions through this week. We see solid support for gold at the $1600 level. We also think the low has been made in silver and think we could see a decent rally in silver prices over the coming month. We will look to sell our SLV calls into this rally, unfortunately booking significant losses on those trades. However in this update we wish to take a moment to explain the situation in Europe since we have received a great deal of questions from subscribers asking for our thoughts on the situation. We are going to attempt to explain the situation by using game theory. We feel this is one of the best ways of understanding the fundamental forces at play. Game theory is the heart of strategic thinking. Something that some people do well, and others not so well. The basics behind Game theory is that it includes a set of rules in which parties are trying to make strategic decisions, by which they may gain or lose, depending on the decisions made by the competing parties. Therefore the outcome of the game is determined by the strategies chosen by all participants. In 1971 Mark Shubik invented a game called the dollar bill auction. This game involved bidding for a 1 dollar bill, the catch being that not only did the winner of the auction have to pay his bid amount, the runner up also had to pay his bid amount. For example if player X bid 98c and player Y bid 99c it is in player X's best interests to bid $1 to avoid a 98c loss. However once this $1 bid is in place, player Y must bid $1.01 in order to lose 1c as opposed to 99c. From here it can never end well, and bidding will continue until players run out of resources or they make a decision to cut their losses. One option to avoid this terrible outcome is not entering the game at all, however the ideal outcome would be forming a partnership between all bidders and having one person bid 1c. Therefore instead of a bidding war in which everyone losses, the bidders gain the maximum profit of 99c. This situation is an example of the Nash Equilibrium. You may ask what this has to do with the market environment? Well, the dollar bill auction is very similar to how the European debt crisis, in particular how the PIIGS have been dealt with. Since May 2010 Europe has been following a policy of doubling down each time their situation deteriorated. It started with Europe trying to save Greece in order to prevent the problems from spreading to Ireland and Portugal. After that failed to work, in August the EU decided to save Ireland, Portugal and provide more funding to Greece to try and stop the problems spreading further. Again this failed to stop these problems from getting worse so in early 2011 the EU started buying Italian and Spanish bonds in

addition to buying more Portuguese, Irish and Greek bonds in order to stem the negative flow further throughout the EU. In July 2011, the EU increased the effort to save Italy, Spain, Portugal, Ireland and Greece so the problem would not spread to the banks. Now, in October, the banks are failing, therefore they need to save the banks and Italy, Spain, Ireland and Greece in order to save the world. Up to this point the EU has done everything wrong from a strategic perspective. They have entered into a game where the best possible outcome vanished when the original funding for Greece did not stem the flow of their problems. However now that they are so far into the game, the best strategic move would be to cease all funding. Even if the EU does believe they have enough money to outbid the problems they are facing, their losses will only continue to increase if they continue this lose/lose game. Therefore the proper strategy for the EU would be to resign from trying to keep Greece afloat and simply let it default. Then let Portugal and Ireland negotiate substantial cuts to their debt. And then finally, let the weakest banks fail. After this series of events has taken place, the EU should enter to provide support and liquidity. After this restructuring has taken place, then there is a strong case for providing a multi-trillion dollar firewall package to ensure a global financial meltdown is not possible. That would be better use of their funds, instead of continuing to give money to Greece, which is simply throwing good money after bad. By the EU continuing along the current path, short term pain will continue to be avoided. However, the next time the EU is in trouble, the market will hit lower lows and they will have fewer tools to combat an even larger problem than they do now. What one should take away from this is to never enter games like the dollar bill auction. Translated to the Eurozone this means never bail out failing institutions, whether they are private corporations or sovereign nations. Let them fail. Then perhaps provide support for the financial system, not for individual participants in the system. Any other course of action creates a moral hazard and leads to greater potential losses in the longer term.

Regards,

SK Options Trading www.skoptionstrading.com

18 October 2011
SK OptionTrader Update: Gold At An Important Technical Juncture

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Nov 19 '11 $150/$149 Vertical Put Spread @ $0.35 Net Credit (10% Allocated). Opened 26th September 2011. This leaves 50% of our model portfolio in cash.

We would like to thank all readers who submitted ideas for possible acronyms for the set of EU countries that we discussed in the last update. We think that Slovakia, Netherlands, Austria, Finland, Slovakia, Slovenia, Cyprus, Estonia, Luxembourg and Malta could prove to be more crucial to the success of the EU than the PIIGS therefore we felt that they deserved their own acronym. A couple of suggestions stood out. We liked LAFNMESS, since the negotiating strategies of these countries is in such a mess that it is near laughable. Also CLASSFMEN was another good one. As we have discussed previously, we continue to believe that a Greek default will come before the end of the year and it should be accompanied by a multi-trillion euro package to firewall against contagion risk. If this package is facilitated by the ECB, then we view it as bullish for gold prices since it is essentially a form of QE. If it comes from loans from France, Germany and LAFNMESS then it decreases the safe haven appeal of German Bunds and French government bonds, therefore increasing the safe haven appeal of gold on a relative basis. Therefore we will continue to maintain a long exposure to gold. We think that the low of the recent correction has been made and predictions of $1400 are overly bearish. Gold prices of over $2000 remain a strong possibility in 2011. Technically speaking we would like to see gold close in the $1705$1710 range within the next week or so to signal that a significant rally is underway. Failure to do this could result in more consolidation in the short term. We will not be adding any more GLD call options at these levels. We are content with our current holding in calls and do not wish to expose ourselves to more negative theta by increasing our call option holdings. We may add to our GLD short vertical put spread trades on weakness, but overall we are content to watch and wait for better trading opportunities to present themselves.

Regards,

SK Options Trading

www.skoptionstrading.com

12 October 2011
SK OptionTrader Update: Focus to Shift From PIIGS to NAFSSCELM

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Nov 19 '11 $150/$149 Vertical Put Spread @ $0.35 Net Credit (10% Allocated). Opened 26th September 2011. This leaves 50% of our model portfolio in cash.

The weaker countries in the Eurozone get a great deal of attention, with Portugal, Italy, Ireland, Greece and Spain given the acronym PIIGS. However we feel as though the focus is shifting to those nations that have so far been left out of the headlines. We are referring to countries like Slovakia, which has just started to make the news. Other countries that fit this category include Netherlands, Austria, Finland, Slovakia, Slovenia, Cyprus, Estonia, Luxembourg and Malta. Unfortunately we couldnt formulate a good acronym with the letters of these countries (the best we could get was CAMELSS but that excludes F and N) so NAFSSCELM will have to do for now. If any readers have suggestions feel free to send them in! We have previously seen Finland demanding collateral in return for providing bailout funding. Apparently demanding collateral against a loan is a bit taboo within the Eurozone at this point. Slovakias response to the latest potential EFSF increase in another example of these nations starting to stir, and so they should. The Slovak Republic has a GDP of EUR63bln and debt of EUR29bln. Relative to other nations, a 46% debt to GDP ratio looks good and this fiscal prudence has lead to an improvement of Slovakias credit rating over recent years, from being A3 with Moodys in 2003 to A1 with positive outlook today with S&P. Therefore they are understandably resistant to lend more money to the EFSF, in order to finance richer less fiscally responsible nations. Slovakia currently guarantees EUR7.8bln of the ESFS. If instead of giving those guarantees to the ESFS Slovakia had simply raised the money for itself by issuing the same amount of debt, they could give each person in the country EUR1560. This issue should not be ignored. Due to the structure of the European political system, the tail can often wag the dog and we expect more resistance to come from the NAFSSCELM nations in future bailout programs. They will most likely prove to be a critical point in determining the ability of the Eurozone to combat these crises in the future. The rumblings by NAFSSCELM increases the pressure on EU policy makers to achieve a comprehensive deal as soon as possible, since it is becoming more likely that agreement on future bailout packages will be harder to obtain. We continue to believe that a Greek default will come before

the end of the year and it should be accompanied by a multi-trillion euro package to firewall against contagion risk. If this package is facilitated by the ECB, then we view it as bullish for gold prices since it is essentially a form of QE. If it comes from loans from France, Germany and NAFSSCELM then it decreases the safe haven appeal of German Bunds and French government bonds, therefore increasing the safe haven appeal of gold on a relative basis. On top of this the US employment and economic picture still looks bleak and the longer this continues the more likely we are to see more aggressive easing of monetary policy from the Fed, which is again bullish for gold. Therefore we will continue to maintain a long exposure to gold. We think that the low of the recent correction has been made and predictions of $1400 are overly bearish. Gold prices of over $2000 remain a strong possibility in 2011. US real interest rates have ticked slightly higher and so gold could tread water for a while, but we are looking for gold to close above $1680 and then $1750 to spark a significant rally higher.

Regards,

SK Options Trading www.skoptionstrading.com

6 October 2011
SK OptionTrader Update: Some Positive Signs In Gold, Global Macro Picture Still Clouded

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Nov 19 '11 $150/$149 Vertical Put Spread @ $0.35 Net Credit (10% Allocated). Opened 26th September 2011. This leaves 50% of our model portfolio in cash.

For the last two weeks in the gold options market we have seen little except for put buying and call selling. However the last trading session offered clues that the sentiment is changing. We saw strong bids for calls and a large reduction in offers on puts. As the saying goes, one swallow doesnt make a summer, therefore we must treat this observation with caution since it has only occurred on the one day. Nonetheless we are encouraged by what we saw. Not only was there more call buying, but the move in implied volatility across the term structure was also encouraging. In the last session November volatility was just over half a point lower, December was unchanged, however December 2012 was up nearly a full percentage point. This indicates to us that whilst there may be opposing opinions regarding the duration of the current correction in gold, the buyers of April 2012 and December 2012 calls are quite positive that the rally will have resumed in the coming six months or so. We feel it will come sooner, hence our holding of March GLD calls. Technically speaking, gold has found decent support around $1600, having tested that level three times in the last ten days or so. The 150dma comes in at $1584 and the 200dma at $1532, both of which we consider key support levels. We reiterate our view that forecasts of sub $1400 gold in the coming months are overly bearish. We are happy to hold our positions on GLD. Our SLV calls remain in a situation where we are really looking to salvage as much value as possible, rather than targeting gains. We were blindsided by the massive CME hike induced sell off in silver, which caused us to abandon our $50 end of year target. To be frank, we simply got it wrong. We will look to offload our SLV calls and take the loss once silver recovers a tad, perhaps once it climbs back to the 200dma, a scenario we think is very possible. We continue to look for opportunities in the US equity markets however the current environment does not justify a position in either direction in our opinion, at least from a risk-reward perspective. When a market is trading on headlines, this makes it difficult to trade since headlines are often very unpredictable. Recently we have seen this in not just US equities, but in most risk assets. One only has to observe how the S&P and EURUSD have been moving in tandem to see this. However trading conditions appear to have deteriorated further, with markets often moving significantly on the mere rumour that a headline may be coming, let alone the headline itself! Until we have more clarity we will opt to keep our gunpowder dry in this area.

The main issue which would provide a great deal more clarity would be a Greek default. We think the Greek debt will be restructured by the end of the year, however what markets are focused on is no longer will Greece default or not. In fact this has not been the issue for some time. The issue is how will they default and what kind of Eurozone package will accompany this default. The Eurozone will need to provide a large package (1 to 2trn Euros) to act as a firewall against the risk of contagion. Until we see the details of such a package we are comfortable keeping our cash on the sidelines. Of course with all the Eurozone news, the dire US employment situation has been somewhat pushed to the bottom of the agenda. The NFP number on Friday will act as a refresher that even if the Eurozone is fixed (or at least patched up) there is still a massive problem on the other side of the Atlantic. Remember that the Fed has a dual mandate to fight inflation and unemployment, unlike the ECB which is focused on inflation. Persistent unemployment of over 9% is piling more pressure on the Fed to ease monetary policy further. A drop in inflation expectations would in our opinion trigger the Fed to ease sooner rather than later, but they will ease and when they do it is very bullish for gold prices.

Regards,

SK Options Trading www.skoptionstrading.com

3 October 2011
SK OptionTrader Update: Speculative Longs Plunge in Gold & Silver

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Nov 19 '11 $150/$149 Vertical Put Spread @ $0.35 Net Credit (10% Allocated). Opened 26th September 2011. This leaves 50% of our model portfolio in cash.

We intend to hold our current positions on gold and silver this week. We still view the downside as limited and view $2000+ as a strong possibility in 2011 for gold. Recently the net speculative positions on gold and silver have dropped to 127,801 and 15,425 contracts. This level has not been seen since March 2009 when the fear of deflation was ripe in the market. This adds weight to our view that the downside from here in gold will be limited. We think US equity markets will continue to move in a choppy lateral motion and moves will be limited until meaningful action emanates from the Eurozone. Any kind of temporary solution will not be welcomed by the markets, whereas a structured Greek default could be taken positively if it was accompanied by a multi trillion euro fund to contain fears of contagion. Due to the difficulty in predicting when such an announcement will come and its details, we will refrain from placing trades on US equity markets for the moment.

Regards,

SK Options Trading www.skoptionstrading.com

27 September 2011
SK OptionTrader Trading Signal: Sell GLD Nov-11 $150/$149 Vertical Put Spread @ $0.35 (10% Allocated)

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 Net Credit (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. Short GLD Nov 19 '11 $150/$149 Vertical Put Spread @ $0.35 Net Credit (10% Allocated). Opened 26th September 2011. This leaves 50% of our model portfolio in cash.

As we have discussed our most recent update, given the drop in gold we are going to add to our long position by selling a vertical put spread on GLD. We hereby signal to sell GLD Nov 19 '11 $150/$149 vertical put spreads for a net credit of $0.35 with of 10% of our capital allocated to this trade. This trade involves simultaneously selling the higher strike ($150) put and buying the lower strike ($149) put, resulting in a net credit. This type of trade is explained in more detail here: http://www.skoptionstrading.com/updates/2011/9/24/sk-options-trading-explains-bullish-verticalput-credit-spre.html

Regards,

SK Options Trading www.skoptionstrading.com

26 September 2011
SK OptionTrader Trading Update: CME Margin Hikes & Our Strategy For This Week

Current Position: Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. This leaves 60% of our model portfolio in cash.

Gold prices have corrected significantly, but the longer term picture remains the same. We are still holding our put spread trades and GLD call options. $2000 gold is still very possible in 2011. Another $50 decline in gold prices would most probably see us selling GLD vertical put spreads. Otherwise we are content to hold our current trades for now. We think predictions for $1400 are overly bearish and we are confident that gold will made a new nominal high before reaching such a level. Looking to silver, the metal has undergone some real technical and psychological damage, and therefore we no longer hold the view that silver prices will reach $50 in 2011. It is likely that we will take a loss on our current SLV call options and it is more a case of ensuring that loss can be minimized as opposed to holding out for a profit. Although we were slightly blindsided by the CME margin hikes, we are not going to blame them for what happened. We were simply wrong on this one. We think that silver is now oversold and therefore intend to sell into a bounce should one occur. We hold the view that a bounce will occur and with that in mind we are contemplating a short term trade with the aim of capturing some of this potential bounce with near term OTM SLV call options. We will wait to see how markets open this week before placing any trades though. We would like to take a moment to briefly discuss the CME margin hikes that in our opinion contributed significantly to the sell-off, particular in silver and particularly during the Friday session. The CME hiked gold margins by 21% and silver margins by 16%. We have long said that discretionary changes in margin requirements are a poor way to operate an exchange. They increase uncertainty and volatility in the market. We see no reason why margin requirements could not be adjusted on a daily or weekly basis, based on a pre-determined formula that takes into account the commodity price and current volatility, in order to generate the appropriate margin requirement. Using this process, margins could be adjusted in a continuous and predictable manner and since the formula would be publicly available, all market participants would be able to know with certainty what the margin requirements were going to be for the next trading session. On top of the fact that the CME does a very poor job of setting margin requirements, market chatter of a CME hike was rampant throughout the Friday, prior to the announcement. Although we are not making any formal accusations, we suspect that information regarding the hike was leaked and those with this information front ran it all day. The system we suggest above would remove any such issues. We have previously mentioned that we were considering a volatility based trade on the US stock market. In particular we are looking at selling vertical call credit spreads on VXX. This trade would be profitable if the VIX index remained at current levels or declined over the coming weeks. We may place such a trade this week, dependent on market conditions.

Regards,

SK Options Trading www.skoptionstrading.com

24 September 2011
SK OptionTrader Trading Update: Prepare To Ride Out Volatility

Current Position: Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Closed @ $1.10 on 22nd September 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. This leaves 60% of our model portfolio in cash.

We intend to hold our remaining call options in GLD and SLV through potentially turbulent times ahead. We are taking a wait and see approach for now, but we would like to maintain an exposure to precious metals as there is still significant event risk on the horizon which could cause an upside shock to gold and silver. Therefore we are holding our calls and put spread trades. Moving on from precious metals, we are contemplating a trade on US equities. The trades we are considering are not directional based, but volatility based. In particular we are looking at selling vertical call credit spreads on VXX. This trade would be profitable if the VIX index remained at current levels or declined over the coming weeks. We will wait until next week before making a final decision on this as ideally we would like to sell into a spike in volatility. Besides fitting our view, this trade would benefit from positive Theta and roll down, however this will all be explained in more detail should we decide to proceed with the trade. We would also like to apologize for the errors made in the trading signal sent out during the last session. Although the signal itself was accurate, the portfolio summary contained errors and therefore we apologize for any confusion caused. During the first two hours of trade our brokerage was having issues receiving information from the exchanges. Therefore we were focused on ensuring that the price given to subscribers was accurate and actionable, and as a result the usual procedures of checking our portfolio summary were overlooked. Polices have been put in place at our end to ensure that this will not happen again.

Regards,

SK Options Trading www.skoptionstrading.com

23 September 2011
SK OptionTrader Trading Signal: Close SLV Jan 21 '12 $45 Calls @ $1.10 (5% Allocated).

Current Position: Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Closed @ $1.10 on 22nd November 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. This leaves 60% of our model portfolio in cash.

Given the sudden drop overnight in silver and the reduction in our bullishness on the metal, we are reducing our exposure and selling our position in the Jan-11 $45 SLV calls. Therefore we hereby signal to close our existing position in SLV Jan 21 '12 $45 Calls at $1.10 for 61.76% profit on the trade. We are still bullish over the longer term but if silver is going to consolidate for a while then we do not want to holding too many calls as they have negative Theta and therefore decline in value over time, ceteris paribus.

Regards,

SK Options Trading www.skoptionstrading.com

22 September 2011
SK OptionTrader Update: Review of September Fed Statement

Current Position: Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. This leaves 55% of our model portfolio in cash.

So, as many expected, the Fed enacted Operation Twist 2 and announced plans to sell short term Treasuries and buy longer term Treasuries securities to mid 2012. Much of this was already priced in and although the exact details may have been slightly more aggressive than market expectations, Twist 2 still falls well within the range of possible expectations. In general the statement still had an easing bias, saying that the FOMC "is prepared to employ its tools" in order to "promote a stronger economic recovery in a context of price stability". Given that Operation Twist 2 was already largely priced into financial markets, the real effect of the statement hinged on its language and hints of further policy moves. However the Fed gave no further hints of future easing, which contributed to the dramatic sell off in equities and put a massive bid on the USD as a risk-off climate gripped financial markets. One may have been surprised that an announcement of monetary policy easing spurred such a risk off tone, but the devil is in details. An announcement of something that the market has already priced in has a negligible effect on the market. The market was probably hopeful of some language in the statement that hinted at the possibility of further easing down the road and when that scenario didnt eventuate, risk assets were sold indiscriminately. Clearly nobody is convinced that the economic and unemployment issues the US faces will be solved by Operation Twist. Simply selling $400 billion of short term Treasuries and using the proceeds to buy longer term Treasuries is not going to solve 9% unemployment. Given that any fiscal response to the situation will most likely be constrained by Americas already dire budget deficit, we think the markets will again, in time, look to the Fed to solve the economic problems. Therefore we are of the view that less easing now means more easing in the future. This makes an even stronger case for higher gold prices in the longer term. However the short to medium term for gold is less clear. US 10 year TIPS closed at +2bps, a level which we still view as supportive of higher gold prices. This should be aided by the focus shifting back on to Europe again and given then track record of EU policy makers we doubt any of the issues can be resolved there in the short term. Therefore we will continue to hold our GLD calls. We deliberately selected Mar-12 expiration to give the trades the ability to survive a consolidation period. We will not be adding to our gold positions in the short term. With regard to silver, we will not be adding to our positions in the short term either. Positive economic news is bullish for silver from the industrial demand side, but it looks like we will not be getting a great

deal of that in the short term. Negative economic news is initially bearish for silver, but if this is followed by monetary easing then this is a bullish factor for silvers monetary qualities. However with no further easing on the short term horizon and the economic situation not likely to dramatically improve in the immediate future, this leaves silver somewhat in no mans land. We will monitor the situation closely in the coming weeks and may look to reduce our silver exposure if the bullish factors for silver deteriorate.

Regards,

SK Options Trading www.skoptionstrading.com

19 September 2011
SK OptionTrader Update: What Future US Monetary Policy Means For Gold Prices

Current Position: Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. This leaves 55% of our model portfolio in cash.

Our in depth report on what future US monetary policy means for gold can be view following the link below and is also attached as a PDF. http://www.skoptionstrading.com/updates/2011/9/18/what-future-us-monetary-policy-means-for-goldprices.html We intend to hold all current trades through the FOMC meeting this week.

Regards,

SK Options Trading www.skoptionstrading.com

15 September 2011
SK OptionTrader Update: A Brief Comment on Gold Stocks

Current Position: Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. This leaves 55% of our model portfolio in cash.

We often get asked about gold mining stocks by subscribers and we would like to address those queries en masse. The majority of questions centre around asking why gold stocks have underperformed so drastically or asking if we think gold stocks are undervalued and worth buying. The following is a summary of our view on gold mining stocks. Let us state up front that we are far from specialists on the mining industry. We are familiar with its workings and how the mining stocks trade and are valued, but we are no means experts. Also please keep in mind that we are a trading operation. We make trades and trading recommendations, we are not investing for the long term. Therefore any arguments based on premises of what stock X will be worth in 10 years are not relevant to our strategy formulation, no matter how valid they may be. Although we could probably write for pages on this subject we will try and summarise our view as briefly as possible. Basically if we have a view that gold prices will go up, then we will look to place a trade on gold or a gold derivative such as options. Gold stocks are not a derivative of gold. They are not purely linked to the gold price. They are linked to the gold price and a myriad of other factors as well. Therefore we do not view them as a clean way to trade gold. If we are going to use a less optimal vehicle to trade gold prices, we have to be compensated for taking those extra risks by an increase in performance. Gold stocks have underperformed gold in recent years. We are content to stay clear of gold stocks will trade gold via direct trading vehicles such as options on GLD. We have held this view for some years now and see no reason to change it at this point. We published an article on May 1st 2008 titled Leveraged Gold ETFs: The End of Gold Stocks. The point of this article was to demonstrate that in modern financial markets there are many more efficient, more reliable and more accurate ways to trade gold than via gold stocks. The rise of ETFs and leveraged gold ETNs, coupled with retail investors having increasing access to options and futures means that there is very little need to own gold stocks. Since we published that article gold prices have risen 110% and yet the HUI index of gold miners has only risen 50%. More detail on our view on gold stocks can be found here: http://www.skoptionstrading.com/updates/2011/7/11/are-gold-stocksthe-real-barbarous-relic.html As a side note, we recently read a report on gold stocks by a reputable firm which argued that gold stocks were undervalued. One of the reasons for this undervaluation in the authors opinion was stated as follows: While the futures market is comfortably forecasting a continuation of todays levels, the majority of sell-side analysts refuse to update their gold price estimates to reflect its recent strength. We had to stop and re-read that line multiple times. For those unfamiliar with how gold

futures pricing works, the futures price is based on the spot price and the interest rate between today and when the futures contract settles. Therefore the futures price has nothing to do with predicting future prices. Futures markets are not a forecast of future gold prices. If that was the case then the markets are apparently forecasting $1900 gold at the end of 2014 and $2000 in mid 2017. That is utter nonsense. The futures market is not comfortably forecasting a continuation of todays levels and to make such a statement demonstrates a severe lack of understanding. We are making a point of drawing your attention to this as it a gross error but one that is often made. We see it time and time again by commentators who are claiming to be experts in the field and yet have shown that they do not understand one of the most basic principles of the market. Regarding our current positions we are still content to hold for now. US real rates suggest to us that gold is fairly priced at these levels. We are still positive on silver despite the recent slide in prices. The medium term trend is still intact and we maintain our $50 target for 2011. The Fed meeting next week is crucial. We will cover this in depth in an update soon.

Regards,

SK Options Trading www.skoptionstrading.com

10 September 2011
SK OptionTrader Update: Gold Vol Curve In Backwardation Again

Current Position: Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. This leaves 55% of our model portfolio in cash.

Despite some sharp intraday selloffs in gold this week, the global macro environment is still supportive of higher gold prices. Most importantly, US real interest rates are still implying much higher gold prices. US 10 year TIPS closed at -3bps, which in our analysis implies a gold price of more than $1900. Therefore we will be maintaining our long position on GLD. For newer readers, we view US real interest rates as a key determinant of gold prices. A more detailed discussion of this can be viewed following this link: http://www.skoptionstrading.com/updates/2011/7/18/decline-in-us-realrates-to-send-gold-past-1800.html Gold remains the best alternative safe haven currency in the world. Although some are coming round to this view, the majority of the market is still not convinced or simply oblivious. The Swiss Franc was the darling of safe haven hunters, but then the SNB came and effectively pegged the currency to the Euro. Gold sold off on this announcement (and very suspiciously just prior to the announcement) but ultimately this is very bullish for gold. Gold is the only currency that cannot be manipulated in this way, since nobody can print gold. Discussion in the mainstream market media about whether it is now better to use the Norwegian Krone or the Chinese Yuan as a safe haven currency are flawed. Nothing is stopping these currencies from being manipulated in the same way as the Swiss Franc. Gold is the only currency that is truly suitable for the safe haven role. The main headlines this week were based around Obamas speech regarding US unemployment. The proposals Obama made were larger than expected, but are not significant enough to change the economic landscape in our opinion. We would reiterate a point from our last update that since Obama had to fight tooth and nail to get the debt ceiling raised; it is hard to imagine that he can do much in the way of government spending to boost employment. The proposals in his speech are unlikely to pass in their current form and even if they do, this does not solve many of the structural problems that the US faces. Our main focus remains on the upcoming Fed meeting, where Ben Bernanke does not face the same constraints as Obama. We would estimate that there is an 80% chance that we will see further monetary easing at this meeting. There is also a significant chance that this easing will exceed market expectations. The fact that the market is expecting the Fed to ease means that the Fed will most probably ease, since not easing will result in a bitter market reaction which is not in the Feds best interest. Moreover, since the Fed is doing nothing to dampen expectations of easing, this further increases the chance that we will see major easing announced at the upcoming meeting. As we have said previously, the most likely form of easing is for the Fed to extend the duration of the Treasuries that they are holding. This involves selling their shorter term bonds and buying longer term bonds,

flattening the yield curve in an attempt to stimulate growth. However we will cover this in more detail closer to the meeting. Looking at the market at a more micro level, we note that the volatility curve for gold options has once again gone into backwardation. This is a rare occurrence and we have not seen this phenomenon since August which was the first time we have seen it happen in a very long time. We suspect the drivers of this backwardation are similar now as they were in August. One of these factors is a large demand for speculative call options that pushes up implied volatilities at the front end of the term structure. Many commentators are noting that gold is vulnerable to a large correction and traders are wary of this. However since current market conditions are still bullish for gold many still want to have a long position on gold but wish to remove the possibility of taking a big loss to the downside. Therefore call options are the instrument of first choice, given their unlimited upside and limited downside. We suspect that this backwardation could persist for a while, but ultimately it will be corrected. Whilst we believe there are trading opportunities in positioning for a normalisation of the vol curve, such a position would be beyond the feasible scope of this services trading recommendations. For now we are content to hold our current positions and they will likely not be altered until the Fed meeting. We still hold the view that silver will challenge $50 again in 2011 and gold will reach $2000 this year. However given the current environment, $2000 gold looks viable within a month, but a lot hinges on this upcoming Fed meeting.

Regards,

SK Options Trading www.skoptionstrading.com

5 September 2011
SK OptionTrader Update: Gold Poised To Make Another All Time High

Current Position: Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. This leaves 55% of our model portfolio in cash.

Strong buying through the London trading session continued into the US session on Friday as dismal employment data triggered further buying of gold. The NFP data showed that there was no job growth in August and payroll gains in June and July were revised down. This increases the pressure on the Federal Reserve to embark on further monetary easing to combat the unemployment issue and further easing of monetary policy is of course bullish for gold prices. President Obama is going to give a speech on job creating initiatives next week, but we do not foresee this having any significant impact on the markets. Given that Obama had to fight tooth and nail to get the debt ceiling raised, it is hard to imagine that he can do much in the way of government spending to boost employment. No doubt the speech will contain some encouraging sound bites, but the market is unlikely to buy into this bluff. In Poker, bluffing is only effective if other players are unsure of the cards that the bluffer is holding. The market is fully aware what cards Obama is holding and therefore no amount of hot air will really convince the market that things are going to change. The Federal Reserve is different case entirely. To continue to the poker analogy, the Fed can print whatever hand of cards it desires. Therefore the market pays far greater attention. As the famous Mayer Amschel Rothschild said, Give me control of a nation's money supply, and I care not who makes its laws. If there is to be a turning point in the economic and employment situation then it is far more likely to come from the September Fed meeting then from any political speech. We therefore will largely disregard what is said in Obamas speech and focus our attention on the outcome from the Fed meeting. We expect further easing of US monetary policy to be announced at this meeting. The most likely form of this easing from the Fed is for them to extend the duration of the Treasuries that they are holding. This is involves selling their shorter term bonds and buying longer term bonds, flattening the yield curve in an attempt to stimulate growth. However we will cover this in more detail closer to the time. Technically speaking we think that gold is well positioned to make new all time highs within a month. It is likely that our $2000 target for gold prices in 2011 will be achieved well before the end of the year. Therefore we will continue to hold our GLD call options. We are glad that we were able to double our position in GLD calls in the recent pullback, buying more Mar-12 $210 calls when gold prices were around $1730. We may add further long positions on additional pullbacks, but we view a further pullback as unlikely at this point. We will not be looking at trimming our gold exposure until prices are challenging $2000.

Silver also looks healthy from a technical perspective. Despite large and often gut wrenching intraday swings in price, silver appears to be in a solid upward channel and we still hold the view that $50 will be seen this year. In fact we think this price level will be achieved well before the end of 2011. We will not be adding to our silver position on weakness, since we are currently aggressively long silver and comfortable with our current level of exposure. We will probably not consider reducing our silver position until our $50 target is close to being met. The importance of considering both technical and fundamental factors in market analysis was highlighted last week, following our discussion of a proposed S&P 500 trade. In our last update we said ...we are getting some strong technical signals from the US equity markets and on the fundamental side we suspect that a decent amount of weak economic data is already priced in. We think the lows that the S&P 500 set in early August will not be rested in the short term, therefore we like the idea of selling SPY vertical put spreads, with strikes around $112 and expiring in Oct-12. However we are wary of the non-farm payroll data (NFP) due out on Friday. We have long viewed the NFP as somewhat of a lottery and therefore we try not to take significant positions just prior to this data being released. This especially applies to NFP sensitive markets such as US equities and interest rate markets. Therefore we will hold off placing any SPY related trades until next week and if the trades still look attractive to us then we may place them. If the stock market moves significantly higher this week and we miss this opportunity then so be it. Our caution was shown to be warranted, as the dismal employment data caused a 30 point sell off in the S&P and sent US 10 year bonds below 2%. We are still contemplating the SPY trade, but we will wait to see how markets open this week before making a decision.

Regards,

SK Options Trading www.skoptionstrading.com

31 August 2011
SK OptionTrader Update: Looking Back At Jackson Hole & Forward To NFP

Current Position: Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. This leaves 55% of our model portfolio in cash. In our last update we said to expect volatility during last weeks trading and we certainly got a great deal of that in the precious metals markets. Gold sold off aggressively, as traders dumped positions when Bernanke did not give any significant hints of further monetary easing during his Jackson Hole speech. Although no QE3 announcement was expected, we suspect there were many longs in the market that had bought gold as a just in case trade, since if any form of QE3 had been hinted at gold would have rocketed higher. When nothing was hinted at, these short term traders dumped their positions since they did not have a longer term view on gold prices. We still hold the view that gold will challenge $2000 in 2011 and therefore took this opportunity to add to our gold positions by purchasing more GLD Mar-12 $210 call options at a significant discount. Silver also moved sharply lower, propelled by similar factors that triggered the decline in gold. However we were not too concerned and held our positions as we still hold the view that silver prices will challenge $50 again in 2011. We did not add to our silver position on this dip as we feel it is large enough at this point. As a reminder our portfolio is aggressively long SLV via Jan-11 call options, and considerably more so than GLD. We may add to our gold position if gold prices fall further, however at this point it looks like we will be simply holding our current trades through this week. On a separate note, we are getting some strong technical signals from the US equity markets and on the fundamental side we suspect that a decent amount of weak economic data is already priced in. We think the lows that the S&P 500 set in early August will not be rested in the short term, therefore we like the idea of selling SPY vertical put spreads, with strikes around $112 and expiring in Oct-12. However we are wary of the non-farm payroll data (NFP) due out on Friday. We have long viewed the NFP as somewhat of a lottery and therefore we try not to take significant positions just prior to this data being released. This especially applies to NFP sensitive markets such as US equities and interest rate markets. Therefore we will hold off placing any SPY related trades until next week and if the trades still look attractive to us then we may place them. If the stock market moves significantly higher this week and we miss this opportunity then so be it.

Regards,

SK Options Trading www.skoptionstrading.com

26 August 2011
SK OptionTrader Trading Signal: Buy GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated) Current Position: Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. Long GLD Mar 17 '12 $210 Calls @ $4.00 (5% Allocated). Opened 26th August 2011. This leaves 55% of our model portfolio in cash.

Given the sizeable correction in gold prices and our longer term bullish view on gold, we are taking thing opportunity to buy more GLD call options. We hereby signal to Buy GLD Mar 17 '12 $210 Calls at $4.00 with 5% of our capital allocated to this trade. As we have mentioned previously, volatility is to be expected this week, but we are content to ride it out since we have the big picture in mind and are prepared for large swings in both directions.

Regards,

SK Options Trading www.skoptionstrading.com

25 August 2011
SK OptionTrader Update: Holding The Fort This Week Current Position: Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. This leaves 60% of our model portfolio in cash.

Our trading strategy for this week will be to simply hold our open trades. We are content with our open positions and although there are some circumstances that would cause us to make alterations to our portfolio, we think it unlikely that such circumstances will arise this week. We intend to hold our GLD calls. At present in the gold options market longer dated calls have been outperforming shorter dated calls, which is perhaps symptomatic of the market being bullish on gold in the longer term but wary of a correction in the shorter term. Our short GLD vertical put spreads are enjoying positive Theta and so we are comfortable letting them continue to tick higher. We may look to reduce our GLD exposure should the gold price near $2000, but until then we are content to hold our current positions and may add to them on weakness. We will continue to hold our SLV calls. We still have a target of $50 for silver before the end of the year and therefore our current strategy is not to reduce our positions until this target is close to being achieved. In reality we think silver will be challenging $50 far sooner than the end of 2011. This should bode well for our aggressive long position on SLV. Volatility is to be expected this week, but we are content to ride it out since we have the big picture in mind and are prepared for large swings in both directions. Regards,

SK Options Trading www.skoptionstrading.com

20 August 2011
SK OptionTrader Update: Another Profitable Trade Closed, More Autotrading, New Website Design

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Expired worthless 19th August 2011 for a 20% Profit. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. This leaves 40% of our model portfolio in cash.

Our short GLD Aug 20 '11 $140/$139 Vertical Put Spread position has now been closed. We opened this trade for a $0.20 Net Credit with 10% of our capital allocated on 28th June 2011. As expected, the puts have now expired worthless and so we have banked a 20% profit on this trade. This profit level was achieved some weeks ago, however letting the position expire rather than closing it saves unnecessary commission costs. We are pleased to announce that autotrading for SK OptionTrader trading signals is now available via eOption. More information on this can be found by following the link below and if you would like to autotrade with eOption or have any further questions, please direct these enquiries to eOption since the autotrading operations are separate from us. http://www.skoptionstrading.com/updates/2011/8/18/sk-optiontrader-generates-a-profit-of-4346-injust-14-days.html We are also implementing a new design for our website www.skoptionstrading.com. Whilst this will not affect anything with regard to the way we do business, we feel obliged to inform subscribers of this as a courtesy. The change in design will take place over the next few days. We welcome any feedback on the changes. Gold surged to around $1880 in the last trading session, which pushed our recently purchased Mar12 $180 GLD calls up sharply. We will hold this trade for now since there is still a strong chance that gold could continue to power higher. However we will not be adding to this position just yet since there is still a very real possibility of a sharp correction in gold prices. We would be buyers of more GLD calls in a pullback since we hold the view that gold prices will challenge $2000 in the next 3 months. Silver also made large gains, with September future closing at $42.93. We have stated previously that once silver surpasses $42 it will most probably run to $50 in a short space of time and we still hold that view. We are comfortable with our holdings in SLV calls and still content to remain aggressively long silver. We would like to point out that our silver position is perhaps more aggressive than it may first appear by glancing at our model portfolio summary. A glance at the summary shows 15% allocated to various Jan-12 SLV call options. Delving deeper would reveal the true extent of our position. For example we

have 5% allocated to Jan-12 $45 SLV calls which we purchased for $0.68. These calls options closed at $3.57, meaning our original allocation of 5% has grown five fold. The fact that we continue to hold this trade is testament to our bullishness on silver prices. When we originally purchased these call options we stated that it was because we held the view that silver prices were going to challenge $50 in 2011. We still hold that view. Therefore we are still content to hold these calls. We are also content not to add to our position at this point, since as we are already aggressively long SLV.

Regards,

SK Options Trading www.skoptionstrading.com

19 August 2011
SK OptionTrader Trading Signal: Buy GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated)

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. Long GLD Mar 17 '12 $210 Calls @ $5.00 (5% Allocated). Opened 18th August 2011. This leaves 50% of our model portfolio in cash.

Following on from our last update, we hereby signal to buy GLD Mar 17 '12 $210 Calls at $5.00 with 5% of our capital allocated to this trade. This is based on the fact that gold prices have broken upwards to new all time highs and could run sharply higher from here. It is also backed up by our longer term bullish view on gold prices. Now that the backwardation in the vol curve for gold options has ended we are more comfortable buying call options.

Regards,

SK Options Trading www.skoptionstrading.com

17 August 2011
SK OptionTrader Update: Gold Challenges $1800 Again

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. This leaves 55% of our model portfolio in cash.

Gold appears to be making a challenge to break significantly above $1800. Whilst we recently took profits and drastically reduced our gold exposure, we are still bullish on gold over the medium to long term. With this in mind we are looking to increase our gold exposure again soon. There are two scenarios that could see us increase our gold exposure from here. Firstly if gold breaks above $1800 significantly to make new all time highs, we would probably be buyers of this momentum. Secondly if gold pulls back significantly we would be more aggressive buyers of this dip. In both scenarios we would be taking a less aggressive position than we took a month ago. This is due to the fact that gold prices have made strong gains in a short period of time and therefore the risk at this point in more symmetric than it was a month ago We would probably choose to increase our gold exposure by purchasing long dated out of the money GLD calls options. We will be cautious buyers however, since implied volatility is at high levels and therefore options are not cheap. We remain bullish on silver prices and comfortable with our current position in SLV calls. Some in the market have expressed concerns that silver has not risen with gold, but we are not concerned. Silver is a different metal from gold and moves with both monetary and industrial factors. A weakening economic environment has been weighing negatively on silver, whilst monetary easing by the Fed and other central banks have been supportive of the silver price. The net effect of this has been approximately neutral. However when considering how changes in these factors could influence silver prices, we think the fundamentals are skewed towards a bullish bias. If the economic picture weakens further, then this will prompt further easing by central banks which will be supportive of silver prices. If the economic picture improves, monetary easing measures will remain in place and we would expect silver prices to move higher. Technically silver looks poised for a significant move too. We see support around $34 and resistance at $50, with minor resistance at $42. With $6 on the downside and $10 on the upside we still view our SLV call options as a compelling trade.

Regards,

SK Options Trading www.skoptionstrading.com

15 August 2011
SK OptionTrader Update: The Market Dynamics That Sent Gold Past $1800

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. This leaves 55% of our model portfolio in cash.

Since our $1800 target for gold has now been met we felt it would be appropriate to review the dynamics that we think pushed gold to this historic level. Our latest article does just that and can be viewed at the following web address: http://www.skoptionstrading.com/updates/2011/8/15/the-market-dynamics-that-sent-goldpast-1800.html This is also attached as a pdf for convenience. We strongly recommend that readers view this article. It covers our view on how various factors impact gold prices and some explanation of what our recent trading recommendations have been based on. Our trading strategy this week will be to hold our current positions and look to increase our gold exposure on significant weakness, probably by purchasing long dated far OTM call options on GLD. We will hold our August put spread position until expiration this Friday since it will most probably expire OTM and we should bank a 20% profit on that trade.

Regards,

SK Options Trading www.skoptionstrading.com

12 August 2011
SK OptionTrader Trading Signal: Close Mar $180 Calls & Oct/Jan $170 Call Calendar Spread

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Closed @ $10.40 on 11th August 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.37 (5% Allocated). Opened 28th July 2011. Closed @ $3.40 on 11th August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. This leaves 55% of our model portfolio in cash. We hereby signal to close our Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread Trade, that we bought for $2.37 on the 18th July 2011 with 5% allocated, for $3.40 Closing this trade involves buying back the Oct $170 calls and selling the Jan $170 calls. Having opened the trade at $2.37 on 28th July and closing at $3.40 on 11th August we have banked at 43.46% profit on this trade in 14 days. We also hereby signal to close our long position in GLD Mar 17 12 $180 Calls at $10.40 We opened this trade at $3.50 with 5% of our capital allocated, so closing this trade at $10.40 means we have banked a profit of 197.14% in 24 days. We are closing these trades since we set an $1800 target for gold which has been reached soon than we thought. Gold appears to be overbought and although it could indeed still head higher we view the risk as fairly symmetric at this point. Since implied volatility is at very high levels, even a sideways move in gold would decrease the value of our calls, so we are opting to bank our profits. We continue to be comfortable holding our other remaining positions at this point.

Regards,

SK Options Trading www.skoptionstrading.com

10 August 2011
SK OptionTrader Update: Fed Statement Drives TIPS Lower, Gold Higher

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.37 (5% Allocated). Opened 28th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. This leaves 45% of our model portfolio in cash.

In the last session we closed one of our GLD call calendar spread positions to bank a profit of 53.67% in 23 days. If gold continues to power higher this week we may look to take more profits. In the same way in which we layered into this long position in gold we intend to layer out in the same manner. This should not be taken as a bearish view on gold prices, although we do think the yellow metal is due a correction, but more reflects our view on volatility which is another key determinant of the gold price. Implied volatility in the gold options market is high and therefore a decline in volatility would see the value of our call option positions decrease, even if gold prices did not decrease. There is also the added factor of time, our GLD call option positions have negative Theta which means they decrease in value with each day that passes. We will continue to hold our SLV calls and have no plans to add to the position at this point. The FOMC statement made history by stating that interest rates would remain low until mid 2013, whereas normally they do not specify dates with respect to interest rate policy. This saw two year bonds trade down as low as 0.16%, making them more like an overnight bill than a government bond. The Fed gave no hints at any form of QE3. However the reduction in interest rates across the yield curve is still supportive of higher gold prices. 10 year TIPS now yield zero; thats right 0.00% in real yield. 5 year TIPS are at -0.84% even 30 year TIPS now yield less than 1%. Whilst we will look to take profits on strength, we will most probably be aggressive buyers on dips as we anticipate that this rally still has a lot further to run. The volatility curve for gold options continues to be in backwardation. This cannot last. We are looking at placing trades that will benefit from a normalisation of the vol curve which we are monitoring continuously in our search for the next trading opportunity.

Regards,

SK Options Trading www.skoptionstrading.com

10 August 2011
SK OptionTrader Trading Signal: Close Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $3.35

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.18 (5% Allocated). Opened 18th July 2011. Closed 9th August 2011 @ $3.35. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.37 (5% Allocated). Opened 28th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. This leaves 45% of our model portfolio in cash

Given the large gap higher in gold prices we think this is a prudent point to take some profits. We therefore signal to close our Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread Trade, that we bought for $2.18 on the 18th July 2011 with 5% allocated, for $3.35 Closing this trade involves buying back the Oct $170 calls and selling the Jan $170 calls. Having opened the trade at $2.18 on 18th July and closing at $3.35 on 9th August we have banked at 53.67% profit on this trade in 23 days. We continue to be comfortable holding our remaining positions at this point.

Regards,

SK Options Trading www.skoptionstrading.com

9 August 2011
SK OptionTrader Update: Gold Surges To $1770, Vol Curve Backwardates

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.18 (5% Allocated). Opened 18th July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.37 (5% Allocated). Opened 28th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011. This leaves 40% of our model portfolio in cash.

The S&P downgrade of US government debt on Friday evening combined with the sovereign debt situation in the Eurzone has unleashed a tsunami of selling in the stock market and a turbo charged buying frenzy in gold. This has caused our portfolio to experience significant gains, up around 8.38% for the day. We think this buying frenzy is made up of two types of investors. Firstly there are those who are buying gold as a safe haven hedge against the current mayhem in other financial markets. Secondly there are longer term bulls who have been caught off guard by gold prices surging during a seasonally weak time of year. These bulls are frantically trying to get long and are fearful of missing out on potentially spectacular gains. These speculators were particularly active in the options market, where the demand for call options was unrelenting during todays trading session. Particularly in the line of fire was the September 1800 Call, the October 1850 Call and the December 1800 Call which was heavily traded on the day. Volatility in gold was violently bought across the term structure, which contributed to the large gains we made in our gold options trades. Remember that where we are long GLD call options, whether via the outright calls or via call calendar spreads we are also long volatility. This means our position increases in value with an increase in volatility, and a large dose of that was served up today. However more important that the increase in volatility was the change that we saw in the volatility curve. This curve plots volatility implied from the options market at different dates in the future. As the attached chart shows (courtesy of FMX Connect), not only did the vol curve rise, it was actually flipped on its head. The term structure of volatility is now in backwardation, a very rare occurrence in the gold options market. This is a result of a dramatic spike in the demand for speculative calls, with a significant portion coming from retail plays. This backwardation is unlikely to last however, since there is an opportunity

to sell near term volatility and buy longer term volatility with the aim of benefiting from a normalisation of the term structure. However with the chaos taking place in all areas of the markets, traders do not quite have the temperament to fight the backwardation in volatility just yet. If this backwardation persists we may look to place a trade that will be betting on a normalisation of term structure of volatility, but we have no intention of placing such trades in the very near future. The EUs incompetence as a political and economic union is on full show at the moment. Many EU officials appear to be in denial and demonstrate a lack of understanding of market dynamics. Unfortunately the ECB does not appear to be doing much better. Last week Trichet was still talking about raising interest rates and yet now the ECB is actively involved in quantitative easing by purchasing peripheral Eurozone sovereign debt. US Congress didnt help the situation by thinking that they could run the US debt limit to within a day of default without making the market jittery. The S&P downgrade may have been the trigger, but the gun has been loaded for some time. In human psychology, nothing sparks fear like uncertainty. One only has to watch a classic horror movie to see evidence of this. The monster doesnt create as much fear as the shadow that the monster forms, when we are unsure what the monster is. Markets are not sure of anything right now and this uncertainty is what is driving the fear and creating carnage across the financial markets. So why is gold going up? In short, gold does not have a central bank or government backing it. Therefore there in no uncertainty over what will happen to this currency. No central bank can cut its interest rate and no government can print gold to dump on the market. With 10 year TIPS now yielding just 20bps, gold still has room to go further. We had said that our $1800 target was conservative and it now appears that $2000+ in the next six months is very possible. Please read the following articles for background information of how we think US interest rates affect gold prices: http://www.skoptionstrading.com/updates/2011/7/18/decline-in-us-real-ratesto-send-gold-past-1800.html andhttp://www.skoptionstrading.com/updates/2011/8/3/us-yield-curveflattening-to-prompt-fed-easing-and-1800-gold.html It is likely that the Federal Reserve could step in and attempt to calm the markets. This could be in the form of QE3 or some other form of monetary easing. If such an announcement is made we would expect to see gold prices retreat in the short term as safe haven hedge positions are unwound, however in the longer term US monetary easing is very bullish for gold. Silver should benefit from US monetary easing and a rebound in equity markets. In conclusion we remain bullish on gold in the longer term although we feel prices are becoming a tad overextended in the short term. Therefore we may look to close out some of our GLD trades this week with the intention on re-establishing similar trades in the future at discounted prices. We are going to continue to hold our SLV calls.

Regards,

SK Options Trading www.skoptionstrading.com

5 August 2011
SK OptionTrader Trading Signal: Buy SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated)

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.18 (5% Allocated). Opened 18th July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.37 (5% Allocated). Opened 28th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011. Long SLV Jan 21 '12 $50 Calls @ $1.35 (5% Allocated). Opened 4th August 2011.

This leaves 40% of our model portfolio in cash.

We hereby signal to buy SLV Jan 21 '12 $50 Calls at $1.35 with 5% of our capital allocated to this trade. Possible margin hikes for gold futures and global volatility has sparked mass intraday liquidation in precious metals. This has not changed our longer term view on gold or silver. Therefore we are taking this opportunity to increase our silver exposure.

Regards,

SK Options Trading www.skoptionstrading.com

4 August 2011
SK OptionTrader Update: Buy SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated)

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.18 (5% Allocated). Opened 18th July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.37 (5% Allocated). Opened 28th July 2011. Long SLV Jan 21 '12 $50 Calls @ $1.84 (5% Allocated). Opened 3rd August 2011.

This leaves 45% of our model portfolio in cash.

We hereby signal to buy SLV Jan 21 '12 $50 Calls at $1.84 with 5% of our capital allocated to this trade. We think that silver prices need to catch up to the recent spike in gold prices in the short term and in the longer term we see silver prices challenging their all time high of $50.This break above $40 should set the stage for the next leg of silvers major rally.

Regards,

SK Options Trading www.skoptionstrading.com

3 August 2011
SK OptionTrader Update: Short Squeeze Pushes Gold to $1675

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.18 (5% Allocated). Opened 18th July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.37 (5% Allocated). Opened 28th July 2011. This leaves 50% of our model portfolio in cash.

Gold has surged to new all time highs at $1675 on the back of what we think is a short squeeze. A view held by many (including us) was that there was a reasonable chance gold prices would retreat once the US reached an agreement on the debt ceiling. When gold prices did not fall and instead began to rise on news that South Korea had accumulated 25 tonnes, those that were short gold in an attempt to profit from a post debt deal drop were forced to cover. This is what we believe drove gold prices up so sharply. $1700 is now in golds crosshairs and if the NFP data on Friday is weak again this could push prices through $1700. For a more detailed summary of our current view on the gold market and what is driving this rally, please read the following article which we have just published: http://www.skoptionstrading.com/updates/2011/8/3/us-yield-curve-flattening-to-prompt-fedeasing-and-1800-gold.html We will continue to add to our gold position on weakness and we are looking at picking up some more SLV calls soon too.

Regards,

SK Options Trading www.skoptionstrading.com

2 August 2011
SK OptionTrader Update: Flattening of US Yield Curve May Push Fed Into Further Easing

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.18 (5% Allocated). Opened 18th July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.37 (5% Allocated). Opened 28th July 2011. This leaves 50% of our model portfolio in cash.

Weaker economic data from the US has caused the yield curve for US Treasuries to flatten significantly in recent months. However when the July manufacturing ISM came in at 50.9, well below the predictions of around 55.5, the curve flattened to a level not seen since August 2010. It was in August 2010 that the Fed first hinted at QE2 and therefore the fact that the curve has got back to this level puts pressure on the Fed to embark on another round of monetary easing. Whether this will be through QE3 or some other mechanism we do not know, however we are confident that further easing of US monetary policy is very bullish for gold prices. For those subscribers who may be unfamiliar with how the yield curve works, we will provide a brief explanation. Bonds of different maturities have different yields. By plotting these yields against their maturities we can build a yield curve. The yield curve becomes steeper if longer term interest rates increase relative to shorter term interest rates. The yield curve becomes flatter if longer term interest rates decrease relative to shorter term interest rates. One way to measure the steepness of the yield curve is to look at the difference between the yields at two different points on the curve. For example one may look at the difference between the yields on 2 year Treasuries compared to the yield on 5 year Treasuries. Such a comparison will often be referred to as 2s5s and is measured in basis points (bps) by subtracting the shorter term yield from the longer term yield. So if one says 2s5s are trading at +225 this means that the yield on 5 year bonds is 2.25% higher than the yield on 2 year bonds. If 2s5s go from +225 to +275 then the yield curve has steepened between those two maturities. If 2s5s go from +225 to +175 then the yield curve has flattened between those two maturities. Now there is no one exact interpretation of what causes shifts in the yield curve. The curve changes with changes in inflationary expectations, default risk, equity markets, the outlook for future interest rates and other factors. However in our opinion the recent run of poor US economic data has been causing the curve to flatten. A weaker economy means that interest rates will probably be held lower for longer, therefore longer term interest rates fall relative to shorter term interest rates, causing a flattening of the curve. We view gold as a currency and since currencies are tightly linked with interest rates, we have a large focus on the US and global interest rate market. We are bringing your attention to the flattening of the

curve since it has now reached a level not seen since August 2010, when the Fed first hinted that QE2 was going to be carried out. Please see the attached chart for an illustration of this. This flattening of the curve is a symptom of a weakening economy and if this continues it puts pressure on the Fed to act; particularly if unemployment begins to rise again. Further monetary easing by the Fed is massively bullish for gold prices. This Friday we have the US non-farm payroll data and if this figure comes in below expectations, as it has done for the past couple of months, this will increase the pressure on the Fed to act. This coupled with a drop in core inflation would almost guarantee further monetary easing. Remember that unlike some central banks the Fed has a dual mandate to maintain price stability and full employment; therefore it is not enough that core inflation is within a tolerable range; the unemployment rate must come down too. We therefore reiterate our view to hold our current long positions on gold and add to them on weakness.

Regards,

SK Options Trading www.skoptionstrading.com

1 August 2011
SK OptionTrader Update: Despite US Debt Deal, Conditions Still Bullish For Gold

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.18 (5% Allocated). Opened 18th July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.37 (5% Allocated). Opened 28th July 2011. This leaves 50% of our model portfolio in cash.

The US has finally come to an agreement on the debt ceiling issue and therefore there is a reduced incentive to hold gold as a safe haven asset and a hedge against the event risk of a possible US default. We expect that the unwinding of these hedge positions will cause some weakness in the gold price, but the longer term picture remains very bullish for gold in our opinion. We will look to take advantage of weakness in the gold price this week by adding to our current long positions on GLD and possibly SLV too if it also endures weakness. The attached chart shows the progress of 5 year and 10 year yields on US TIPS throughout July 2011. We continue to believe that US real rates are the key determinant of gold prices in the medium to long term. Since US real rates have declined substantially we are still confident that gold will reach $1800 in the next six months. For background reading on the inverse relationship between gold prices and US real rates please see our recent article: http://www.skoptionstrading.com/updates/2011/7/18/decline-in-us-real-rates-to-send-goldpast-1800.html We think there is a good chance that the Fed will need to embark on further easing of monetary policy in coming months and this will drive US real rates lower and send gold prices higher. The US debt deal has not changed our view on gold. We have not taken long positions on gold in an attempt to benefit from increased safe haven buying due to the possibility of a US default. We have taken long positions on gold based on our macro view that the US will continue to struggle with economic growth and unemployment. Therefore the Fed will keep interest rates exceptionally low for an extended period of time and will most probably implement looser monetary policy, which gold will benefit from.

Regards,

SK Options Trading www.skoptionstrading.com

29 July 2011
SK OptionTrader Update: Gold To Remain Contained Until Debt Ceiling Outcome Is Known

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.18 (5% Allocated). Opened 18th July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.37 (5% Allocated). Opened 28th July 2011. This leaves 50% of our model portfolio in cash.

Despite being less than 1% away from all time highs, we expect gold prices to remain contained until the outcome of negotiations over the US debt ceiling is known. At the moment we feel traders are reluctant to place any large trades until after this issue is resolved, simply because of the uncertainty. Waiting a week to remove that uncertainty appears to be the order of the day. This is evident not just in the gold market, but across other sectors as well. For example some Treasury bills that mature just after August 2nd are yielding 12bps more than those maturing before August 2nd. As a reminder the debt ceiling situation must be resolved by August 2nd. This is a large premium for waiting just an additional week or so, but is a symptom of trading operations being unwilling to take such risks with the global financial crisis still fresh in everyones minds. Such trades have very low probability of going wrong, but if they do go wrong the losses can be massive. An appropriate simile would be to think of these trades as picking up pennies on a high speed rail track. One would probably be able to pick up many pennies without being troubled by a train, however if a train does come, its game over. We are fairly unconcerned over the debt talks, especially relative to many others. We do not think the US will default and even they technically do default by making a late payment, we doubt this would trigger an Armageddon scenario that many are so concerned about. In our view getting one late payment on a 5, 10, 20 or 30 year bond has a minimal effect on the bonds value. However we think the politicians involved in these discussions are adequately fearful of a worst case scenario that they will not allow a default. Our trading plan is as follows. We have a long position on gold that we are comfortable with. If gold prices retreat on news of a deal being reached, we will be adding to our long positions. We suspect that there are a significant number of longs in the gold market that are long to simply hedge against a possible US default. These hedge positions would unwind if a deal was reached. We would be buyers on this dip as our medium to long term view is still bullish. Looking at our current positions, when taking all current open trades into account our exposure to gold is below where we would like it to be, given that we see gold at $1800 in the next six months. At current levels a $10 increase in the price of gold would increase our portfolio value by around 1%,

holding all other factors constant. Half of our portfolio is in cash and our August vertical put spread trade has no real upside from here, since the spread has narrowed from 0.20 to 0.005 and cannot go below zero. Whilst we would like our gold exposure to be higher, we are very happy with the Theta on our current position, which is negligible. Theta is equivalent to the cost of holding our position, the decay in time premium of options. We designed our current portfolio with the aim of neutralising the Theta effect with a mix of long call, long call spreads and short put spread positions, so it is good to see that our plan is working as we intended. We would also be buyers of far OTM SLV calls if silver prices should drop with gold. We are comfortable holding our current position on SLV $45 calls, which has more than tripled since we bought them. We still see silver challenging $50 and probably going past $50 in the next six months.

Regards,

SK Options Trading www.skoptionstrading.com

28 July 2011
SK OptionTrader Trading Signal: Buy GLD Jan-12/Oct-11 $170 Calendar Call Spread @ $2.37 (5% Allocated)

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.18 (5% Allocated). Opened 18th July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.37 (5% Allocated). Opened 28th July 2011.

This leaves 50% of our model portfolio in cash.

We hereby signal to buy the GLD Jan-12/Oct-11 $170 Calendar Call Spread @ $2.37. This trade involves selling the GLD October 22nd 2011 $170 calls and buying the GLD Jan 21st 2012 $170 calls for a net debit of $2.37. We are allocating 5% of our capital to this trade. The idea of this trade is that selling the nearer dated call can cheapen the cost of buying the longer dated call, especially if the nearer dated call expired worthless. If gold prices rocket upwards faster than we anticipate then this trade should still be profitable since it benefits from an increase in implied volatility as well as an increase in gold prices. This trade has negative Theta, although the Theta is less negative than simply owning the call outright. This trade is sometimes also called a bull calendar spread. To reiterate are selling GLD Oct-11 $170 calls and buying GLD Jan-12 $170 calls. We are bullish on gold over the longer term, but we doubt GLD would rally past $170 by October. Therefore we are selling the October calls with the view that they will expire worthless, in order to lower the cost of entering the trade. If GLD does rally sharply past $170 before October, this trade will still be very profitable. The trade has limited downside. The maximum at risk is the cost of the Jan-12 calls minus the revenue from selling the Oct-11 calls. If one is not comfortable with calendar spreads, one can always just buy the longer dated calls instead.

Regards,

SK Options Trading www.skoptionstrading.com

28 July 2011
SK OptionTrader Trading Signal: Buy GLD Jan-12/Oct-11 $170 Calendar Call Spread @ $2.37 (5% Allocated)

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.18 (5% Allocated). Opened 18th July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.37 (5% Allocated). Opened 28th July 2011.

This leaves 50% of our model portfolio in cash.

We hereby signal to buy the GLD Jan-12/Oct-11 $170 Calendar Call Spread @ $2.37. This trade involves selling the GLD October 22nd 2011 $170 calls and buying the GLD Jan 21st 2012 $170 calls for a net debit of $2.37. We are allocating 5% of our capital to this trade. The idea of this trade is that selling the nearer dated call can cheapen the cost of buying the longer dated call, especially if the nearer dated call expired worthless. If gold prices rocket upwards faster than we anticipate then this trade should still be profitable since it benefits from an increase in implied volatility as well as an increase in gold prices. This trade has negative Theta, although the Theta is less negative than simply owning the call outright. This trade is sometimes also called a bull calendar spread. To reiterate are selling GLD Oct-11 $170 calls and buying GLD Jan-12 $170 calls. We are bullish on gold over the longer term, but we doubt GLD would rally past $170 by October. Therefore we are selling the October calls with the view that they will expire worthless, in order to lower the cost of entering the trade. If GLD does rally sharply past $170 before October, this trade will still be very profitable. The trade has limited downside. The maximum at risk is the cost of the Jan-12 calls minus the revenue from selling the Oct-11 calls. If one is not comfortable with calendar spreads, one can always just buy the longer dated calls instead.

Regards,

SK Options Trading www.skoptionstrading.com

23 July 2011
SK OptionTrader Update: Gold Looks To Pin $1600, Citi See $100 Silver

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.18 (5% Allocated). Opened 18th July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. This leaves 55% of our model portfolio in cash.

Gold rallied in the last session, with August gold futures settling at $1601.50 as sovereign debt issues on both sides of the Atlantic continued to dictate the intraday market movements. Despite rallying sharply during the start of trading, gold failed to make a new all time high. To one watching the day to day action in the gold market this week, it almost appears as though there is a magnetic force around $1600, with gold prices not straying too far below or above that level. We would like to explore one explanation for this, which stems from trading in the gold options market. The open interest in August 2011 $1600 gold call options as of the close was 20248, the attached graph shows how high this figure is relative to other strikes. Please note this is for gold options on futures, not GLD options on gold ETF shares that we trade. However the same principles apply as GLD is merely a proxy for gold. When there is a large open interest (OI) at a particular strike and that strike is roughly at the money (ATM) prior to expiration, we have an interesting situation. Longer dated ATM options tend to move in a more continuous fashion than shorter dated options. This is because the longer dated options value is fluctuating with the markets view on how much the option will be worth at expiration. This is essentially a function of the probabilities of where the underlying asset will be trading on expiration day. Even if the option goes out of the money (OTM), there is still a chance it will go in the money (ITM) before expiration, so it is still worth something. The more time until expiration, the higher the chance that the market will move and send the option back ITM, so the more it is worth. However for shorter dated options one observes that they trade in a more discrete manner, especially when the options have only a few days to go until expiration. Whether the option is ITM or OTM makes a massive difference to its value in the days preceding expiration. So looking at the gold 1600 August calls, there are holders of 20248 contracts that will be watching every tick and many others (such as us) who will be watching them and their movements. For those that are short the calls, having gold trade below 1600 means that the calls they sold are worthless and they will get the keep their premium. However a few ticks above 1600 means that they could have to deliver futures to the traders they have sold the calls too. Usually the shorts will be hedged accordingly and be buying and selling futures to offset their short position in the calls. However since this position is so large and likely involves some large players, there is a chance that traders on both sides will be trying to push gold in their favour. The result of this can be that the strike gets pinned, which means gold will trade close to 1600 up until expiration.

Usually a pinned strike implies that those who were short calls were stronger players than the longs. It is not unusual for large players to influence the price of something such as gold significantly around option expiration. Therefore we think gold prices will track close to $1600 until these call options expire on Tuesday. If prices are driven down prior to expiration, we will be buyers of this dip, since we are aware that a significant amount of any selling pressure prior to Tuesday will be related to the August options expiration. Keep in mind that all market participants can see this information and know of the large open interest at 1600. Therefore traders that have no position in 1600 August calls will still be trading with this information in mind, which re-enforces our view that the 1600 strike will be pinned. Silver could be contained along with gold until, however there are no apparent outstanding positions in silver August options. Sticking with silver however, there was an interesting piece out from Citigroup which said that silver prices could hit $100. We do not find it interesting because of its content, but it is interesting that a major financial institution is paying attention to such a small market. The piece basically said that silver prices multiplied 5.3 times from Nov 1971 to Feb 1974, the corrected 44% before rising 13 fold to the 1980 peak. It then went on to note that silver prices multiplied 5.8 times from Nov 2001 to Mar 2008, corrected 60% and therefore could rise 13 fold again to over $100 (since the low in 2008 was roughly $8.50 and 8.5 x 13 = $110.50). We are not sure how sound this reasoning is, although we concur with the conclusion. What we find interesting about this is that a large bank has finally set an aggressively bullish, and perhaps more realistic, target for silver prices. Usually silver is largely ignored by such institutions and those who do publish forecasts are seldom correct. For example Goldman Sachs covers gold (and they have made some decent calls to their credit) but for silver they simply multiply their gold price forecast by its historical relationship to silver. Goldmans current 12 month forecast for gold is $1730 and their 12 month forecast for silver is $28.90. So they are saying that gold is going to increase 8% whereas silver is going to decline 28%. We will not delve into the absurdity of that hypothesis. For a number of years there was a great deal of talk about the rumoured massive short positions of banks such as JPMorgan in the silver market. We suspect that much of this has been covered by now. We are fairly sure that no trading operation would be allowed to maintain a short position on something as it rose from $8.50 to nearly $50. In fact a great deal of silvers parabolic rise early this year could perhaps be attributed to such short positions being squeezed. What will be interesting is when large banks and other financial institutions start dabbling on the long side of the silver market. Such institutions are not very familiar with how the dynamics of the silver markets function, especially relative to their understanding of other financial markets. If they were familiar they would demonstrate this by giving silver more coverage and would already be long. The Citigroup piece is an indication that such institutions may be going to establish long positions in these markets in the near future, which is extremely bullish.

Regards,

SK Options Trading www.skoptionstrading.com

19 July 2011
SK OptionTrader Update: Decline In US Real Rates To Send Gold Past $1800

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.18 (5% Allocated). Opened 18th July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. This leaves 55% of our model portfolio in cash. We have just published an article entitled Decline In US Real Rates To Send Gold Past $1800 which can be read here: http://www.skoptionstrading.com/updates/2011/7/18/decline-in-us-real-rates-tosend-gold-past-1800.html We have long said that US real rates are the key determinate of gold prices in the long to medium term. We think that the current level of US real rates is supportive of higher gold prices and further declines in US real rates will drive gold to $1800+.

Regards,

SK Options Trading www.skoptionstrading.com

19 July 2011
SK OptionTrader Trading Signal: Long Positions on Gold

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. Long GLD Jan 21 12 / Oct 22 11 $170 Calendar Call Spread @ $2.18 (5% Allocated). Opened 18th July 2011. Long GLD Mar 17 12 $180 Calls @ $3.50 (5% Allocated). Opened 18th July 2011. Short GLD Dec 17 11 $145/$140 Vertical Put Spread @ $1.13 (10% Allocated). Opened 18th July 2011. Short GLD Jan 21 12 $165/$160 Vertical Put Spread @ $3.35 Net Credit (10% Allocated). Opened 18th July 2011. This leaves 55% of our model portfolio in cash.

Following on from our recent updates, we hereby issue the following trading signals: We hereby signal to buy the GLD Jan-12/Oct-11 $170 Calendar Call Spread @ $2.18. This trade involves selling the GLD October 22nd 2011 $170 calls and buying the GLD Jan 21st 2012 $170 calls for a net debit of $2.18. We are allocating 5% of our capital to this trade. We hereby signal to buy the GLD Mar-12 $180 Calls @ $3.50. This trade involves simply buying the GLD March 17th 2012 calls for $3.50. We are allocating 5% of our capital to this trade. We hereby signal to sell the GLD Dec-11 $145/$140 Vertical Put Spread @ $1.13. This trade involves buying the GLD December 17th 2011 $140 puts and selling the GLD December 17th 2011 $145 puts for a net credit of $1.13. We are allocating 10% of our capital to this trade. We hereby signal to sell the GLD Jan-12 $165/$160 Vertical Put Spread @ $3.35. This trade involves buying the GLD January 21st 2012 $160 puts and selling the GLD January 21st 2012 $165 puts for a net credit of $3.35. We are allocating 10% of our capital to this trade.

Regards,

SK Options Trading www.skoptionstrading.com

18 July 2011
SK OptionTrader Update: Our Plan For Gold

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. This leaves 85% of our model portfolio in cash.

The wait is over. We intend to build a number of long positions on gold, with the view that gold could reach $1700-$1800 in 2011. We will be placing trades this week and over the following weeks that will prove to be profitable if our view is correct. The following is a basic outline of the trades we are looking to place. We intend to sell vertical put spreads on GLD. We already have an open vertical put spread trade, but this trade has almost reached its full profit potential. We will hold the current vertical put spread until expiration where we think it will expire worthless and we will bank a 20% profit. The vertical put spreads we are looking to sell in the coming weeks include the GLD Jan-12 142/137 or something similar. This trade will have positive Theta (increases in value with time) and will help offset the negative Theta of other trades we are going to place. We also intend to sell the GLD Jan-12 Vertical 160/155 Put Spread. As gold prices increase and these puts move OTM, this trade will also enjoy positive Theta and help to offset the negative Theta of other trades. We will probably be allocating 10% to each of these trades. More information on these types of trades can be found by following this link: http://www.investopedia.com/articles/optioninvestor/02/041202.asp#axzz1S2nbY7wh A few notes on selling vertical put spreads for our newer subscribers or as a refresher for those familiar with the trade. Firstly for executing this trade we used a limit order and we prefer those to market orders. Secondly, the trade has both limited profit and limited losses. The maximum profit is the difference between the prices of the puts involved in the spread. Thirdly, in terms allocating our capital, we use the amount at risk. For capital allocation purposes in our model portfolio we define the amount at risk as the difference in the strike multiplied by the deliverable shares in the contract multiplied by the contracts in each leg of the spread So to allocate say $2000 to a short vertical put spread trade (where the difference in the strikes was 1) in accordance with our model portfolio one would buy/sell 20 contracts in each leg. This would mean that the maximum one could lose would be $2000 which is equal to the difference in the strike multiplied by the deliverable shares in the contract multiplied by the contracts in each leg of the spread = 1*100*20 = $2000 To allocate say $2000 to a short vertical put spread trade (where the difference in the strikes was 5) in accordance with our model portfolio one would buy/sell 4 contracts in each leg. This would mean that the maximum one could lose would be $2000 which is equal to the difference in the strike multiplied by the deliverable shares in the contract multiplied by the contracts in each leg of the spread = 5*100*4 = $2000 To get more technical the actual amount at risk per contract in the legs is net of the credit one receives. However for the purposes of capital allocation and stating return on capital we prefer to err on the conservative side. Therefore the scenario explained above will both overstate the amount at

risk and understate the percentage profit, but we think this is preferable to understating risk and overstating profit. Although you are of course free to trade and allocate capital as you see fit as all trading decisions are yours to make. Another trade we are looking at placing are call calendar spreads on GLD. This trade involves buying a call option on GLD and simultaneously selling a nearer dated call option with the same strike price. We are intending to place a Long GLD $170 Jan-12 Calls/Short GLD $170 Oct-11 Calls trade or something similar. The idea of this trade is that selling the nearer dated call can cheapen the cost of buying the longer dated call, especially if the nearer dated call expired worthless. If gold prices rocket upwards faster than we anticipate then this trade should still be profitable since it benefits from an increase in implied volatility as well as an increase in gold prices. This trade has negative Theta, although the Theta is less negative than simply owning the call outright. This trade is sometimes also called a bull calendar spread. To reiterate, we intend to be selling GLD Oct-11 $170 calls and buying GLD Jan-12 $170 calls, or something similar. We are bullish on gold over the longer term, but we doubt GLD would rally past $170 by October. Therefore we are selling the October calls with the view that they will expire worthless, in order to lower the cost of entering the trade. If GLD does rally sharply past $170 before October, this trade will still be very profitable. The trade has limited downside. The maximum at risk is the cost of the Jan-12 calls minus the revenue from selling the Oct-11 calls. This trade still carries negative Theta. If one is not comfortable with calendar spreads, one can always just buy the longer dated calls instead. You can read more about this type of trades by following this link: http://www.theoptionsguide.com/bull-calendar-spread.aspx The last trade we are looking to place are some good old simple call buying. We are considering possibly buying the GLD Mar-12 $170 or $180 Calls or something similar. For silver we will look to add to our current long dated OTM SLV calls on weakness. All of the above are merely our ideas at present and could be changed depending on market conditions. We will look to place some of these trades this week and possibly in the following weeks, buying on weakness when it presents itself. It is very possible that some of these trades may go sideways or down in the short term. However we are comfortable with this and are keeping the big picture in mind. If we are correct with our view for the longer term, these trades should all work out very well.

Regards,

SK Options Trading www.skoptionstrading.com

13 July 2011
SK OptionTrader Update: FOMC Minutes and Italian Debt Fears Force Gold To Challenge Highs

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. This leaves 85% of our model portfolio in cash.

Gold prices surged in the last trading session, partly due to continued fears over Italian sovereign debt and partly due to the language of the FOMC minutes that were released, before backing off just shy of all time highs. Whilst we view Italian sovereign debt fears as a poor reason to take long term positions in gold (See: http://www.skoptionstrading.com/updates/2011/6/28/trading-gold-and-itseurozone-crisis-premium.html), we do keep a very close watch on US monetary policy since we believe US real rates are a key determinate of gold prices (See: http://www.skoptionstrading.com/updates/2010/12/5/the-key-relationship-between-us-real-ratesand-gold-prices.html). What drove gold higher in the FOMC minutes were hints of further monetary stimulus if economic growth remained too slow to meaningfully reduce the unemployment rate in the medium run. However, disagreement was evident in the minutes with some members thinking that the Fed should be taking steps to begin removing policy accommodation sooner than currently anticipated. There were also differing views on inflation risks, which of course is always a main focal point given than the Feds dual mandate is to maintain price stability and full employment. Following this statement, yields on 10 year Treasury Inflation Protected Securities (TIPS) fell to 60bps in the last trading session, their lowest in 2011. If real rates continue to decline, or even remain at this already very low level, we think this is very bullish for gold prices. The next round of US monetary easing could be a QE3, a cap on longer term interest rates or simply more aggressive language from the Federal Reserve that rates will remain near zero for an extended period of time. Given this scenario, we think gold prices will easily trade above $1600 in the next 6 months and could reach $1700 by year end. These are our conservative estimates. Given that we have this view, we would like a substantially larger long position in gold, and silver to a certain extent. For silver we still like the longer term far out of the money call options and will look to add to our current SLV position on weakness. For gold we have a combination of trades we would like to place on GLD. We like far OTM calls in January and March 2012. We also like the idea of a calendar spread position, selling October 2011 calls to help offset the costs of longer dated calls in January or March 2011. We are not in favour of risk-reversals, although we think they will perform well, since we prefer trades with more limited downside. Selling vertical put spreads similar to the GLD trade we currently have in place is another trade we are considering. All trades details will be covered in detail before we send out any signals. As for our current trades, we will continue to hold our SLV calls. We will also most probably hold our vertical put spread position until expiration. Although the spread has already narrowed to 0.05 from 0.20, we think we can squeeze the position for a few more percentage points and that both puts will expire worthless, leaving the spread at zero and banking us a 20% return on the trade. We do not see any fantastic opportunities in other markets at present, although we are keeping a close watch for trades that could complement our view on gold prices and US monetary policy. We may remain on the sidelines for the rest of the week, but will be looking to enter the market to place new trades next week.

Regards,

SK Options Trading www.skoptionstrading.com

12 July 2011
SK OptionTrader Update: Dodd-Frank Act, AutoTrading & Gold Stocks Article

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. This leaves 85% of our model portfolio in cash. We have recently published an article entitled Are Gold Stocks The Real Barbarous Relic? which may be of interest. The article argues our long standing view that gold stocks are not the best vehicle for gaining exposure to rising gold prices. The article may be viewed by following this link: http://www.skoptionstrading.com/updates/2011/7/11/are-gold-stocks-the-real-barbarous-relic.html A number of subscribers have been in contact with us asking how the Dodd-Frank Act, which is due to come into force on July 15th 2011, will affect gold and silver prices. In our opinion the affect on gold and silver prices will be negligible, if it has any affect at all. We will attempt to explain why, but keep in mind that we are not lawyers and so this is simply our interpretation of the legislation. What appears to have concerned most people is Section 742 A (on page 357 if one would like to trawl through the Act itself) which basically outlaws Over the Counter (OTC) margin account trading on all commodity futures under most circumstances. OTC does not refer to buying bullion at a store; it refers to derivative contracts and these are made between parties without an exchange as an intermediary. Ones ability to purchase bullion will be unaffected since Dodd-Frank provides exemptions for retail transactions in gold or silver if it is delivered within 28 days. So there is nothing to worry about there. Primarily the Dodd-Frank Act is preventing OTC trades which bypass a futures exchange. This is aimed to increase transparency, improve protection for market participants and enhance the CTFCs ability to regulate the markets. One can still trade futures and options on gold and silver provided that they are on an exchange. This also means that ETF and ETF options trading are also unaffected by the law. With regard to prices movement around this change in the law, there are those who are perhaps concerned that there could be a significant move in prices due to people no longer trading OTC derivatives on gold and silver. However they need not worry. Although it is true that OTC derivatives are often hedged using futures or the physical we do not foresee any sizeable spillover. The unwinding of OTC positions in response to this legislation is likely to have little effect on the price. This is because the OTC derivative market in gold and silver is very small when compared to the global physical bullion and the futures market internationally. These soon to be outlawed OTC products are mainly used by retail speculators and in addition to this one must keep in mind that they were not buyers and many will have been shorting the market. Therefore the unwinding of hedges by these product providers will most probably be neutral and any effect on the price will be insignificant. Due to number of subscriber requests that we have received, we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and therefore autotrading is now available for SK OptionTrader signals. For more information please follow this link: http://www.skoptionstrading.com/updates/2011/7/11/sk-optiontrader-enters-partnership-with-globalautotrading.html As a side note, you can now follow SK Options Trading on Twitter @skoptions. Although we will not of course be publishing any subscriber only content on Twitter, we will use it whenever we publish new commentaries or other points of interest.

Finally, the abysmal NFP number on Friday sent gold higher and concerns over the Italian sovereign debt have kept up the momentum. Italy has the 3rd largest amount of debt outstanding behind USA and Japan, so this is of course a big issue. We will watch with interest, but would comment that any efforts to prevent a crisis by banning the short selling of Italian bonds are severely misguided. If one cannot short Italian sovereign debt then one would short something with a high correlation with Italian bonds, (which could be the bonds of Spain, France, Portugal, Greece or Italian corporate debt) which in our opinion will exasperates the crisis and increase the threat of contagion. We will hold our two open positions for now and look to add long positions in gold and silver on weakness.

Regards,

SK Options Trading www.skoptionstrading.com

8 July 2011
SK OptionTrader Update: Our Strategy for the Next Major Rally in Gold Prices

Current Position: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. This leaves 85% of our model portfolio in cash.

A decent rally in precious metals over the last week or so has enabled our two open trades to get off to a good start. The GLD vertical put spread that we sold at $0.20 has narrowed to $0.08 as of the close. It is likely that we will hold this trade until the options expire on August 20th. We expect both of these options to expire worthless and therefore the spread to narrow to zero, meaning we would bank a 20% gain for this trade. The SLV calls we purchased at $0.68 have jumped to $1.16, a gain of over 70% in less than 7 days. Whilst we are pleased that this position has delivered such a significant gain in a short period of time, we are not yet looking to take profits. As we have discussed in previous updates, we are looking to make multiple times our capital on this trade and it is based on a longer term view that silver prices will at least match their 2011 high. However if the trade continues to progress at the same rate that it has over the last week, we would consider at least reducing our position, perhaps by selling half of our calls. We will cover this in more detail should this opportunity present itself. Over the next six weeks we will be actively looking to establish further long positions in both gold and silver. We are analysing a number of trading ideas and especially looking at selling more vertical put spreads and purchasing long dated far out of the money calls, similar to those we already own on SLV. A combination of these two positions appeals to us as the Theta effect on our overall portfolio can be somewhat neutralised. As a reminder Theta is the decay of the time premium in an option price. Being long calls gives our portfolio negative Theta, as the value of call options decline with time, all other things being equal. Being short vertical put spreads give our portfolio positive Theta, as the value of our vertical put spread increases with time. Remember that a being short vertical put spreads is similar to being outright short put options, except your risk is limited by purchasing the lower strike put. In our opinion the main driver for the next major rally in gold prices is low US real interest rates. (Please view our previous article on this relationship: http://www.skoptionstrading.com/updates/2010/12/5/the-key-relationship-between-usreal-rates-and-gold-prices.html) Our view has not been deterred by the recent correction and consolidation phase in gold. We expected this to happen and it is a quite natural path for the market to take after a large move higher. We feel the lows of this phase may have already been made and if they havent we would only see gold prices going to around $1445 where we see significant technical support. We feel that gold is still undervalued relative to US real rates and since we do not see US monetary policy tightening any time soon, we think gold prices will move significantly higher in the next six months or so. We also think gold prices will be supported by more central bank buying, particular from emerging market central banks. Emerging market central bank gold holdings increased 3.4 million ounces in March, far more than the monthly average increase of 0.5 million ounces (since May 2009). In the next trading session all eyes will be on the US Non-Farm Payroll data, which will likely set the tone for markets next week. Payrolls data is always somewhat of a lottery so we will not attempt to

make a prediction on the number or how the market will react. We would suggest simply trying to ignore the noise and remain focused on the big picture. Interestingly the S&P 500 is back to where it was prior to last months NFP and the Greek debt scare induced decline. We missed this rally, despite being on the verge of pulling the trigger, but we will continue to monitor the situation to see if another trading opportunity arises.

Regards,

SK Options Trading www.skoptionstrading.com

6 July 2011
SK OptionTrader Update: Downside In Gold Is Still Limited

Current Positions: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. This leaves 85% of our model portfolio in cash. We just released a commentary on gold entitled The Downside In Gold Is Limited and the article can be viewed here: http://www.skoptionstrading.com/updates/2011/7/4/the-downside-in-gold-islimited.html Whilst the view expressed in the article will be familiar to our subscribers, it may be of interest to see a little more detail behind our views. A week ago we executed a trade based on the view that the downside in gold was limited by selling GLD Aug 20 '11 $140/$139 Vertical Put Spreads for a $0.20 Net Credit and allocating 10% of our portfolio to this trade. We were speculating that the spread would narrow from 0.20 and so it appears that the trade is working in our favour with the spread standing around 0.105 as of the close. We will continue to hold this trade as we still think the spread will narrow to zero and the puts will expire worthless. We would look to add to this position with similar trades on weakness. Silver prices rallied sharply in the last trading session, which was very favourable for our SLV Jan 21 '12 $45 Calls that we purchased last week at $0.68. As of the close these calls were marked at $0.99, so we are up about 45% on this trade. Whilst it is encouraging to get off to a good start, we are not looking to take any profits at this point. As discussed previously we bought this trade with a longer term view in mind, that silver prices would challenge their 2011 high, therefore we will continue to hold with this scenario in mind. We have no reason to believe that the jump in silver prices over the last trading session is the beginning of a new major rally. The attached simple silver chart indicates to us that silver is still in its consolidation phase. With this in mind we would not be surprised if silver edged lower or simply goes through more lateral movement. This could cause our calls to erase the gains made so far but if that is the case then we will continue to hold as we have a longer term view in mind for this trade. Equally we are not looking to take a quick profit on this trade as we still think these calls offer good value from a risk-reward perspective around $1.00. In conclusion, on further weakness in the silver price we would look at either adding to our SLV Jan12 calls or possibly establishing a position in the SLV Jan-13 $45 calls. On further weakness in gold we would look to sell more vertical put spreads and we are looking into buying some long dated far out of the money calls on GLD, but this trade is probably a few weeks away.

Regards,

SK Options Trading www.skoptionstrading.com

4 July 2011
SK OptionTrader Update: A Note on Trading Less Liquid Options

Current Positions: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. This leaves 85% of our model portfolio in cash.

On July 1st 2011 we signalled to purchase SLV Jan 21 '12 $45 Calls at $0.68 with 5% of our capital allocated to the trade. This was a trade that we had discussed for some time and is a longer term speculation that silver prices will at least match their high made in April 2011. Since these options are long dated and far out of the money, they are less frequently traded and often involve a larger bid/ask spread. Given this challenge and that some subscribers may not have got the contracts at $0.68 we would like to express our views about trading these less liquid options. Firstly, we do not control the market. The market will move independently of our trades and there is nothing we can do about that. We can understand that some may be frustrated if prices have moved higher before they could buy, but we have no control over that. It may also be the case where prices move against us after we place the trade, in which case people who place the trade after we have are likely to get a better price and earn a higher return than us. It is very unlikely that we will nail the absolute bottom price in any trade. Secondly, this service has one main (and probably single) aim. That is to issue profitable trading signals and increase the value of our model portfolio as much as possible. Since we are trying to maximise profits, we are trying to buy near the bottom and sell near the top. So if prices rise after we buy or fall after we sell this simply means we are doing what we set out to do. It would be ludicrous for us to issue a buy signal before we thought prices would fall, just so our subscribers could get better prices. Not only would this reduce the credibility of our trading signals, it penalises those subscribers who have acted quickly and got a price close to ours. Thirdly, please keep the big picture in mind. We had said multiple times that this particular trade was based on a longer term view and we said we were speculating that these calls could go to $4.00+. With this in mind, a few cents here and there is not going to make a massive amount of difference. Also a few days or even weeks may not make a great difference. Whilst we are not at all suggesting that one should stop paying attention to detail, we are simply saying to keep this in mind. Fourthly, if you are relaxed about placing this kind of trade, we find it beneficial to execute one of two strategies. The first is to simply determine what price you are prepared to pay for the options and place a Good Til Cancelled (GTC) Limit order. The second is to sit on the bid until you are filled. This can be beneficial when trading options that may have a wide bid/ask spread. This involves simply keeping your order at the bid price, or just above the bid price, in the hope that a seller will cross the spread and come down and hit your bid, as opposed to you crossing the spread and going up to meet the sellers offer. Its not so worth it if the spread is 1 or 2 cents, as you are risking not being able to place the trade, but when the spread is 10+ cents on an option that costs less than a dollar, it is certainly worth thinking about. These are simply our suggestions; you are free to trade however you wish. Fifthly, we try to make our trading recommendations as liquid as we can whilst ensuring that the trades are still optimal. SLV traded over US$700m of shares on Friday. It is hard for the price of a particular option on something like SLV to get too out of line. Suppose the Jan-12 $45 calls did get overpriced or underpriced, traders have the $44 and $46 calls to trade instead. Indeed, as a subscriber you are free to trade as you wish and so if you agree with our view but think the $44 or $46 calls offer a better price than the $45s then you are of course free to execute your trade on those options, they will behave much the same as the $45 calls anyway.

Finally with regard to this trade specifically, we think there is a good chance the market will go back to 0.68 and probably below, so we wouldnt panic if your order has not been filled yet. Remember that this position has negative Theta, which means it loses value each day as the time premium decays (ceteris paribus). Equally we wouldnt panic if we had paid 0.78, since we have the bigger picture in mind. As mentioned previously, we like these calls under $1.00 from a risk-reward perspective. We arent about to flip these calls for a 14% gain, this trade is one that is looking for a home run, a return of multiple times the capital invested over a longer time period. We hope this is helpful to those subscribers who may have had questions about this trade and may be of use in the future should we place similar trades.

Regards,

SK Options Trading www.skoptionstrading.com

2 July 2011
SK OptionTrader Trading Signal: Buy SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated)

Current Positions: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. Long SLV Jan 21 '12 $45 Calls @ $0.68 (5% Allocated). Opened 1st July 2011. This leaves 85% of our model portfolio in cash.

Following on from discussion in our previous updates, we hereby signal to purchase SLV Jan 21 '12 $45 Calls at $0.68 with 5% of our capital allocated to this trade.

Regards,

SK Options Trading www.skoptionstrading.com

29 June 2011
SK OptionTrader Update: Silver Calls and Golds Euro Debt Crisis Premium

Current Positions: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. This leaves 90% of our model portfolio in cash. We have just published a new article entitled Trading Gold and Its Eurozone Crisis Premium. Although the article is available to the general public, we think that reading this article would assist subscribers in how we view the dynamics of the gold market. One can view the article here: http://www.skoptionstrading.com/updates/2011/6/28/trading-gold-andits-eurozone-crisis-premium.html We still intend to purchase the SLV Jan-12 $45 calls and possibly the SLV Jan-13 $45 calls this week and we will most likely look to place these trades on weakness with 5% of our capital allocated to each. We would like to clarify a few basic points on the GLD vertical put spread trade we placed in the last trading session. Firstly for executing this trade we used a limit order and we prefer those to market orders. Secondly, the trade has both limited profit and limited losses. The maximum profit is the difference between the prices of the puts involved in the spread. In the case of our last trade this was $0.20. The maximum loss is the difference between the strikes, which in the case of the last trade was $1.00. Therefore one can think about it as the maximum profit being 20%. Thirdly, in terms allocating our capital, we use the amount at risk. So to allocate say $2000 to this trade in accordance with our model portfolio one would buy/sell 20 contracts in each leg. This would mean that the maximum one could lose would be $2000 which is equal to the difference in the strikes times deliverable shares in the contract times contracts in each leg of the spread = 1*100*20 = $2000 To get more technical the actual amount at risk per contract in the legs is $80. Although we are risking $100 per contract we also receive a $20 net credit which reduces our capital at risk to $80 per contract, or $1600 in the example above. However for the purposes of capital allocation and stating return on capital we prefer to err on the conservative side. Therefore the scenario explained above will both overstate the amount at risk and understate the percentage profit, but we think this is preferable to understating risk and overstating profit. Although you are of course free to trade and allocate capital as you see fit as all trading decisions are yours to make.

Regards,

SK Options Trading www.skoptionstrading.com

29 June 2011
SK OptionTrader Trading Signal: Sell GLD Aug-11 $140/$139 Vertical Put Spread @ $0.20

Current Positions: Short GLD Aug 20 '11 $140/$139 Vertical Put Spread @ $0.20 Net Credit (10% Allocated). Opened 28th June 2011. This leaves 90% of our model portfolio in cash.

We hereby signal to sell the GLD August 2011 $140/$139 Vertical Put Spread for $0.20 with 10% of our capital allocated to this trade. This trade involves selling the $140 puts and buying the $139 puts, resulting in a net credit of $0.20.

Regards,

SK Options Trading www.skoptionstrading.com

28 June 2011
SK OptionTrader Update: Planning To Sell GLD Vertical Put Spreads We are currently 100% in cash and have no open positions.

In our last update we said that we were considering taking a short position in some GLD vertical put spreads. We may place one of these trades in the next session. We are looking at something like the August 2011 $140/$139 Vertical Put Spread, which involves selling the Aug-11 $140 puts and buying the Aug-11 $139 puts. We will hold off purchasing any SLV calls for now but may do so later in the week.

Regards,

SK Options Trading www.skoptionstrading.com

27 June 2011
SK OptionTrader Update: Risk-Reward in Long Dated SLV Calls Looking Attractive We are currently 100% in cash and have no open positions. A couple of weeks ago in our update entitled Precious Metals in Limbo we commented that silver was coming close to offering some attractive trading opportunities, saying: Silver appears to be close to offering some attractive trading opportunities. For a longer term horizon we like both the SLV Jan-12 $45 calls (trading at around $1.20) and SLV Jan-13 $45 calls (trading at around $3.40) and so if prices can drift just a bit lower we may take a position. This is based on our view that in the next major move upwards silver will go up past $50, so the risk reward dynamics in these trades could be about to become too good to pass up. The Jan-12 $45 calls we mentioned have now fallen to $0.95 from $1.20 (a 20.8% decline) and the Jan-13 $45 calls have fallen to around $3.10 from $3.40 (an 8.8% decline). Therefore the risk-reward dynamics in these trades is becoming attractive to us. We may look to buy one or both of these calls options with 5% allocated to each trade this week. These would most likely be longer term trades and it is possible that we may hold these positions for many months. It is also possible that we may endure some significant paper losses on the positions in the short term, however we feel that this is outweighed by the potential reward should our view on silver turn out to be correct. We still think that silver will pass its previous high and trade above $50, possibly before 2012. This scenario would see the Jan-12 $45 calls trading at $5.00+, so at less than $1.00 we believe they offer good value from risk-reward perspective. Also, we may look to sell vertical put spreads on GLD if gold prices continue to fall. Our S&P trade is still on hold as we evaluate whether indeed the MACD and other indicators are giving positive signals.

Regards,

SK Options Trading www.skoptionstrading.com

22 June 2011
SK OptionTrader Update: S&P MACD Gives Positive Crossover We are currently 100% in cash and have no open positions.

This is just a brief note to confirm that the positive sub-zero MACD crossover that we were waiting for to place our S&P 500 trade appears to have happened. However we will wait for a bit longer to ensure that it isnt a false crossover before moving to place any trades. Even if the crossover is genuine, as always the options market will still have to offer us attractive risk-reward dynamics before we execute any trades.

Regards,

SK Options Trading www.skoptionstrading.com

21 June 2011
SK OptionTrader Update: S&P MACD Prepares To Give Buying Signal, Gold Eyes Highs We are currently 100% in cash and have no open positions.

We have mentioned several times during the recent fall in US equities that we would like to be buyers of this dip, but we were simply waiting for one or two further technical signals before placing any trades. One of these signals, a sub-zero positive crossover on the MACD could happen this week and would bring us closer to placing a trade on SPY. This trade would most probably be in the form of selling a vertical put spread, as we have done before. However a catalyst will be required to trigger this crossover and at present it looks as though this catalyst will be coming from Greece, or at least the Eurozone in general, as that has been the markets main focus over the past few weeks. With a great deal of focus on sovereign debt issues in the peripheral Eurozone nations, gold and silver are going somewhat unnoticed and have grabbed few headlines recently. Perhaps this is warranted for silver, which is still consolidating after its dramatic correction, but gold is only $35 away from its all time highs. The Greek crisis and fears of contagion have prompted a fair amount of safe haven buying and have kept gold prices reasonably well supported. However should the situation in Greece improve with say another bailout (or be perceived to improve) then these safe haven hedges could begin to unwind, creating a downward pressure on the gold price. We saw a similar scenario unfold in 2010 when gold prices gradually ticked upwards, even setting a new all time high at $1265 before falling back to around $1150 shortly afterwards. Given that the 2010 spring rally was also driven by Greek debt concerns, we are getting a feeling of dj vu when we observe the markets. Therefore although a new all time high in gold would cause us to seriously consider taking a long position again, any technical breakout to a new high would have to be supported by some fundamental reasoning as to why gold was about to embark on a major rally. This is important as there is a big difference between a breakout that signals the start of a major move and a breakout that is caused mainly by a lot of safe haven hedge positions in gold that could be easily unwound should the Greek crisis subside. We will reiterate that contrary to what some may believe, one does not have to be in to win, one simply needs to be in at the right time and on the right side of the market. We will focus on being right rather than simply being involved and as we have said before, having no position is in itself a position and one we are still quite comfortable having. We thank you for your patience during our deliberations and assure that we are working hard a number of trades which we hope to execute soon.

Regards,

SK Options Trading www.skoptionstrading.com

14 June 2011
SK OptionTrader Update: Precious Metals In Limbo

We are currently 100% in cash and have no open positions.

Having rallied for a few weeks on concerns over the situation in Greece and a poor NFP number, gold prices have fallen back as the Chinese tightened monetary policy yet again. Gold appears to be suspended in limbo, lacking a catalyst to propel it to new all time highs, but also with enough fundamental support to prevent a serious decline. Therefore gold prices are being driven by headlines and news events that are here one week and gone the next. This fits with our view that gold prices are undergoing a consolidation phase, a view that we have held for over a month now. During this phase this kind of market behaviour is to be expected and although many commentators will happily give detailed reasons for why gold is up $10 today or down $7 the next, we believe the price action almost fits within the realm of statistical noise and there is no real story to tell here. We know some may consider it boring to say that nothing much is happening in the market at present, but the fact is there is very little going on in the gold space at the moment. One can try and fit a story to what has been happening, but we have yet to hear one that is plausible. Sometimes prices just drift up and down for a while, there does not have to be an exciting tale explaining every tick. Now is a time to be patient and to simply wait and watch. There will be opportunities soon, but just not yet. Timing is crucial when it comes to options trading so we are not going to jump into trades that we are not completely comfortable with just to be in. We wrote last week about wanting to take a long position on the S&P 500 and that is a view we still hold. However as we have stated before we would like to see one or two further technical signals before we place any trades. For gold we see strong support at around $1445, so should it retreat to that level we would likely take some long positions. Otherwise we are content to sit on our hands for now. A new all time high may change our view. Silver appears to be close to offering some attractive trading opportunities. For a longer term horizon we like both the SLV Jan-12 $45 calls (trading at around $1.20) and SLV Jan-13 $45 calls (trading at around $3.40) and so if prices can drift just a bit lower we may take a position. This is based on our view that in the next major move upwards silver will go up past $50, so the risk reward dynamics in these trades could be about to become too good to pass up. We also remain interested in a covered call strategy on SLV should prices fall further.

Regards,

SK Options Trading www.skoptionstrading.com

9 June 2011
SK OptionTrader Update: Buying Opportunity Approaching in US Equities We are currently 100% in cash and have no open positions.

On the back of poor employment data, renewed concerns over Greece, seasonal factors and a less than rosy tone in the global markets, the stock market has been selling off considerably. We said in our last update that we thought the S&P 500 was getting close to a buy and now it is even closer. This is a fairly simple buy the dip type of trade and although we may wait for a couple of additional technical signals before placing a trade, such as a positive MACD crossover, with the RSI close to 30 we think the downside is reasonably limited from here. The trade we are considering is selling vertical put spreads on SPY, similar to the trade we executed shortly after the Japanese earthquake. We are looking at strikes around $125 with either June or July expirations. We will of course provide more details on the trade should we proceed with it.

Regards,

SK Options Trading www.skoptionstrading.com

6 June 2011
SK OptionTrader Update: Poor NFP Data Does Not Mean QE3, Yet We have no current positions. This leaves 100% of our portfolio in cash.

The market was sent into a tailspin last week when the US Non-farm payroll data came in at just 54K contrasted with expectations of around 150K. Market chatter has oscillated from when the Fed will raise interest rates to the possibility of QE3. Whilst the market may be content to change its view this frequently, one must keep in mind that the Fed will not be as trigger happy. We are not downplaying how bad the NFP data was, it was a poor piece of data. However at present that is all it is, just a poor piece of data. The Fed is not about to crank up the printing presses again just because of one bad number. There will need to be sustained run of poor employment data and a consistent rise in the unemployment rate, or a significant fall in core inflation and inflation expectations with flat unemployment before the Fed considers taking action. Therefore we are not going to jump back into gold with the expectation that the Fed will flood the markets will liquidity just yet, although of course the probability such a scenario has increased. We are standing by our view that gold and silver will consolidate in the short term and whilst we have yet to see any trading opportunities that capture our imagination, some do come close. We like the idea of selling covered calls on SLV, given our bullish longer term view on silver prices. We also think that the S&P is getting close to a buy, perhaps not via outright call options, but by selling vertical put spreads on SPY as we have successfully done in the past. We may look to place one of these trades this week, depending on market conditions. Regards,

SK Options Trading www.skoptionstrading.com

31 May 2011
SK OptionTrader Update: Greek Bailout To Reduce Safe Haven Demand For Gold

We have no current positions. This leaves 100% of our portfolio in cash. Talk of another Greek bailout has not only sent the Euro higher, but triggered risk on trading in many areas of the market, with S&P500 futures rallying sharply, treasuries selling off and risk currencies making strong gains. Gold has been supported by safe haven buying over the last week or so, stemming from renewed fears of sovereign debt troubles in Europe. Whilst the yellow metal has yet to sell off, if Greece does indeed get another bailout, we expect that the safe haven risk premium that is currently built into the gold price will subside and prices will trend sideways to lower. This is a seasonally weak time of year for gold and we do not see any reason to change our view that gold prices are in a consolidation phase. In fact those who can cast their minds back to this time last year (we know thats a very long time ago for many traders) will remember that we saw a very similar scenario back then. Greece was in trouble, gold rallied, the Euro plunged then a bailout package came out and we saw gold selloff and the entire process reverse itself. Perhaps we are in for repeat show. One thing that we find very interesting about the Greek situation is the incentives at work for the Greek government. If they do intend to default, then it makes sense to rack up as much debt as possible and squeeze every cent in bailout money that they can from the EU. Perhaps an appropriate analogy is that of a bank robber who knows he is going to get caught, but before making a dash overseas he may as well borrow the limit on his credit cards and max out his overdraft facility. It doesnt matter how much debt he accumulates or at what interest rate, since he intends to go into hiding abroad. Similar incentives apply to Greece. However we merely mention this as a point of interest and as much as we would love to delve in to the philosophical, psychological and game theory dynamics of the situation, that is not the purpose of this service. The purpose of this service is to find actionable trading opportunities in the US options market and at present we cannot see any that really capture our imagination. Patience is the order of the day and we will continue to sit tight for now. Contrary to what some may believe, one does not have to be in to win, one simply needs to be in at the right time and on the right side of the market. We will focus on being right rather than simply being involved and as we have said before, having no position is in itself a position and one we are still quite content with. Regards,

SK Options Trading www.skoptionstrading.com

23 May 2011
SK OptionTrader Update: Spread Trades Expire for 17% & 18% Gains, Now 100% In Cash

Current Positions: Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated) Opened 28th March 2011. Expired for 18% Profit. Short GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Opened 13th April 2011. Expired for 17% Profit. This leaves 100% of our portfolio in cash.

Since our vertical spreads on SPY and GLD expired worthless we have banked profits of 18% and 17% respectively on these trades and now find ourselves 100% in cash. The question now becomes how can we best deploy this capital and at present we cannot see any fantastic opportunities. We are contemplating executing a covered call strategy on SLV, as well as eyeing up SLV Jan-12 $45 calls for a longer term play, but for now we are comfortable to watch and wait. Contrary to what many believe, one does not have to be in to win, one simply needs to be in at the right time and on the right side of the market. We will focus on being right rather than simply being involved and as we have said before, having no position is in itself a position and one we are currently happy with.

Regards,

SK Options Trading www.skoptionstrading.com

20 May 2011
SK OptionTrader Update: Current Trades Are Being Held Until Expiration

Current Positions: Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated) Opened 28th March 2011. Short GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Opened 13th April 2011. This leaves 80% of our portfolio in cash.

This is just a brief note to confirm that we are holding our current trades until expiration, which will be at the end of the next trading session. We expect both spreads to expire worthless therefore we will bank profits of 18% and 17% respectively.

Regards,

SK Options Trading www.skoptionstrading.com

17 May 2011
SK OptionTrader Update: As Expected, Gold Volatility Decreases

Current Positions: Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated) Opened 28th March 2011. Short GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Opened 13th April 2011. This leaves 80% of our portfolio in cash.

The gold options market has been very quiet this week, with gold and silver entering a consolidation phase and implied volatility decreasing in all months. This is precisely what we expected to happen, as we detailed in our most recent market update Gold & Silver To Consolidate. It appears that many players really have followed the old proverb and sold in May and gone away. We are of course in that camp being 80% in cash and we will probably be 100% cash after this week. We are comfortable with this position and see no reason to change it until we find trading opportunities that offer us some attractive risk-reward dynamics. Currently we cannot see any that warrant our capital. A couple of ideas we are considering include selling covered calls on SLV and taking a short position on US Treasuries, however we will cover these strategies in more detail should we decide to go ahead with the trades. One must not confuse being in cash as having no position since even being out of the market is a position in itself and a position we are currently happy with. With regard to our two open trades, we still intend to hold them until expiration which is at the end of this week and we expect them to expire worthless and therefore we can bank maximum profits on both positions.

Regards,

SK Options Trading www.skoptionstrading.com

13 May 2011
SK OptionTrader Update: Gold & Silver To Consolidate Current Positions: Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated) Opened 28th March 2011. Short GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Opened 13th April 2011. This leaves 80% of our portfolio in cash.

Despite a turbulent day in the gold futures market, volatility was actually marked lower in the gold options market. If volatility cannot perform on days like today, this leads us to believe that it will be heavily sold in the coming weeks and months as gold and silver look to consolidate. Since volatility is a fundamental part of options pricing, with higher implied volatility leading to a higher option price, a decrease in implied volatility means that owners of puts and calls will suffer. We think calls could be particularly hit, as we suspect there are still some longs in the market that will be looking to sell their calls on every rally. We do not expect gold or silver to snap back to their recent highs. Trading activity in the last few sessions has led us to believe that we are going to enter a trading range for a while. Since we do not have a strong directional view in the short term and since we are bearish on volatility, we will not be buyers of puts or calls for now. Although there are strategies that we could employ to profit from gold and silver entering a consolidation phase, such as selling vertical spreads, we are not comfortable placing any such trades until we are more confident of what this range will be. To the downside we see $1400 as the major support, but doubt gold will reach this level since it is unlikely to break further support at around $1440-$1450. If such a level was to be breached then we would place some trades, but until then we are content to stay in cash for now. Aside from precious metals we are contemplating taking a short position on US treasuries again, since we think yields are too low, particularly on longer term bonds. However we will wait the week out will and provide more details at a later stage should we decide to go ahead with the trade. With regard to our two open positions, we still intend to hold them until expiration.

Regards,

SK Options Trading www.skoptionstrading.com

12 May 2011
SK OptionTrader Trading Signal: Close SLV Vertical Put Spread

Current Positions: Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. Short SLV May 21 '11 $37/$36 Vertical Put Spread @ $0.26 Net Credit (10% Allocated) Opened 8th April 2011. Closed @ $0.60 11th May 2011. Short GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Opened 13th April 2011. This leaves 80% of our portfolio in cash

We hereby signal to close our short position in the SLV May 21 '11 $37/$36 Vertical Put Spread by purchasing back the spread at $0.60. This is a loss of 34% on the trade. Although we are taking a loss on the trade, we still think it is the right decision. We put the chances of the spread expiring below/above $36 as around 50-50. Since we take a 100% loss if the spread expired below $36 and book a maximum 26% gain if the spread closes above $37, the risk-reward dynamics are now skewed against us. It is for this reason that we are choosing to close the position and take the loss, ending our streak of 59 winning trades in a row. However overall out of the 79 trades we have closed, 76 have been closed at a profit.

Regards,

SK Options Trading www.skoptionstrading.com

9 May 2011
SK OptionTrader Update: Precious Metals Trading Strategy Post Correction

Current Positions: Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. Short SLV May 21 '11 $37/$36 Vertical Put Spread @ $0.26 Net Credit (10% Allocated) Opened 8th April 2011. Short GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Opened 13th April 2011. This leaves 70% of our portfolio in cash.

Last week was a turbulent one in the gold and silver markets, as well as commodities in general. Fortunately we sold out of our June GLD call options before the correction and closed all eight trades at a profit, with an average gain of 50.29% per trade. We think the June gold options are now in full liquidation mode, with big players taking profits/cutting losses and rolling into other months. This was exuberated by the drop in gold last week, but even without that drop it is prudent not to be long OTM June calls any more since they will be aggressively sold as expiration approaches and the Theta on the calls accelerates exponentially. With regard to our current open positions, we are happy holding our SPY and GLD vertical put spreads to expiration. We expect these puts will expire worthless and we will bank full profits on both trades. Our SLV vertical put spread is a bit trickier though. Since the put spread we sold is now ITM this means time is working against us. We will probably look to close this position sooner rather than later as a substantial loss could occur if it were to expire at current prices. However we are going to hold for a while longer as there is a decent chance that silver prices will bounce this week and we would look to close the trade on this bounce. If not we will simply have to cut our losses. Now that we have dealt with our current open trades we will now address our trading strategy going forward. We have 70% of our model portfolio in cash and therefore we have spent the weekend analyzing how best to deploy this cash. First let us say that those looking to accumulate gold and silver positions for the longer term should view this as a good buying opportunity. Although such recommendations are beyond the scope of this service we would nonetheless like to express our opinion that this is a classic case of buying the dip, particularly in silver which has been hit extremely hard. We think long positions taken in gold and silver futures or ETFs will show handsome gains over the year to come. However since this is an options trading service our trading decisions are not as clear cut due to the time element involved in options trading that is nowhere near as prevalent in trading futures or ETFs. Simply replicating the view described above with by purchasing near term call options could be catastrophic if we enter a consolidation period over the summer months. This is because there would not be a sufficient rally in prices to cover the decay in time premium (Theta) on the calls. Therefore we are not going to dive back in and buy truckloads of calls options on this dip, even though we view taking long positions via futures or ETFs as good trades. Having trawled through a myriad of different options trading strategies searching for the best riskreward dynamics we have come up with a few ideas. For gold we cannot really find anything that grabs our attention. We came up with plenty of trades that we thought would make money, but none that offered the optimum risk-reward dynamics we strive to indentify. The best one found was selling GLD July 2011 vertical put spreads with strikes around $140, but even that didnt parti

cular have us jumping out our seats. We found better opportunities in silver, given that it has corrected a lot further than gold and is itself oversold at present. We thought selling the SLV July 2011 $33/$32 vertical put spread at $0.42 offered good value and relatively decent risk-reward dynamics. There were other good opportunities as well but the standout trade for us was the Jan-2011 $45 SLV calls which were trading around $2.00. If you hold the view, as we do, that sometime between now and January 2012 silver will match or beat its old high just above $49, and consequently SLV will trade at $47.50 we think these call options offer great risk reward dynamics as a longer term trade. Of course one would have to be prepared to take some paper losses if we go through a consolidation period over the next few months, but even so in the longer term we think this trade has great potential. If SLV is at $47.50 (its previous high) upon expiration in January 2012, then the holder will bank a modest 25% gain. Since [(47.50-45.00)/2.00]-1=25%. If SLV reaches $47.50 before then the holder will be sitting on an even greater profit. If SLV trades higher than $47.50 then the holder will make an even greater profit. If SLV is significantly higher than $47.50 before January 2012 then the trade really does start looking good. We intend to place this trade this week, providing that silver doesnt gap massively higher right away and we firmly believe it offers a worthwhile risk-reward trade off. We are comfortable with it showing a paper loss over the summer if things consolidate and we may even add to our position if the price is a lot lower in coming months. This is slightly different from a lot of the trades we do due to the extended time horizon. However we have chosen the longer time horizon to reduce the Theta effect on our position and because it fits our view, allowing us to ride out any summer doldrums. That is all we are comfortable doing at present, but should another opportunity present itself we will be quick to act. Other than that we are content to wait and watch for now.

Regards,

SK Options Trading www.skoptionstrading.com

4 May 2011
SK OptionTrader Trading Signal: Sell Remaining GLD $150 & $155 Calls Current Positions: Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Sold at $3.50 Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Sold at $1.70 Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. Short SLV May 21 '11 $37/$36 Vertical Put Spread @ $0.26 Net Credit (10% Allocated) Opened 8th April 2011. Short GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Opened 13th April 2011. This leaves 70% of our portfolio in cash.

We hereby signal to sell our position in GLD Jun 18 '11 $150 Calls that we purchased at $2.28 with 5% of our capital allocated to this trade. We have just closed this trade at $3.50. We also hereby signal to sell our position in GLD Jun 18 '11 $155 Calls that we purchased at $1.46 with 5% of our capital allocated to the trade. We have just closed this trade at $1.70. This is part of our previously stated plan to take profits on our GLD June calls before the Theta on the positions got too great We have booked a profit of 53.51% on the $150 calls and a profit of 16.44% on the $155 calls so we are happy about how these trades have played out.

Regards,

SK Options Trading www.skoptionstrading.com

3 May 2011
SK OptionTrader Trading Signal: Sell GLD $150 & $155 Calls Current Positions: Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Sold @ $4.65 2nd May 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Sold @ $2.60 2nd May 2011. Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. Short SLV May 21 '11 $37/$36 Vertical Put Spread @ $0.26 Net Credit (10% Allocated) Opened 8th April 2011. Short GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Opened 13th April 2011. This leaves 60% of our portfolio in cash.

We hereby signal to sell our position in GLD Jun 18 '11 $150 Calls that we purchased at $2.23 with 5% of our capital allocated to this trade. We have just closed this trade at $4.65. We also hereby signal to sell our position in GLD Jun 18 '11 $155 Calls that we purchased at $1.20 with 5% of our capital allocated to the trade. We have just closed this trade at $2.60. This is part of our previously stated plan to take profits on our GLD June calls before the Theta on the positions got too great We have booked a profit of 108.52% on the $150 calls and a profit of 116.67% on the $155 calls so we are very happy about how these trades have played out.

Regards,

SK Options Trading www.skoptionstrading.com

27 April 2011
SK OptionTrader Update: Stops Triggered on GLD Calls Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Stop @ $4.23. Triggered and Sold @ $4.10. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Stop @ $4.23. Triggered and Sold @ $4.10. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Stop @ $2.20. Triggered and Sold @ $2.01. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Stop @ $2.20. Triggered and Sold @ $2.01 Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. Short SLV May 21 '11 $37/$36 Vertical Put Spread @ $0.26 Net Credit (10% Allocated) Opened 8th April 2011. Short GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Opened 13th April 2011. This leaves 50% of our portfolio in cash.

The stops we placed on our GLD calls have been triggered. The stops on the $145 June calls at $4.23 were triggered and sold at market for $4.10. The stops on the $150 June calls at $2.20 were triggered and sold at market for $2.01. Gold was sold on the open and so the calls opened at a level below our stops, hence the stops were triggered and the price we received was lower than the stop price. These stops are not guaranteed so once the market is at or below the stop level, the order is executed at market. Whilst it is a tad disappointing that we had to close the trades below our stop levels, we still banked profits of 26.15% and 51.85% on the $145 calls and profits of 12.29% and 16.86% on the $150 calls.

Regards,

SK Options Trading www.skoptionstrading.com

26 April 2011
SK OptionTrader Update: Placing Some Stops on GLD Calls Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Stop @ $4.23 Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Stop @ $4.23 Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Stop @ $2.20 Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Stop @ $2.20 Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. Short SLV May 21 '11 $37/$36 Vertical Put Spread @ $0.26 Net Credit (10% Allocated) Opened 8th April 2011. Short GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Opened 13th April 2011. This leaves 30% of our portfolio in cash.

Given that we are sitting on some reasonable paper profits on GLD and that are June calls are now getting quite close to expiration, we are inserting the stop orders detailed above on four of our GLD call option trades in an attempt to lock in some gains. We may add further stops later this week and/or sell into strength. We intend to hold our vertical put spread positions on SPY, SLV and GLD. Readers may wish to read our new article regarding the speed of the recent increase in silver prices, entitled Think Silver Has Gone Parabolic? 1980 was 5 Times Faster which can be viewed here:http://www.skoptionstrading.com/updates/2011/4/26/think-silver-has-gone-parabolic-1980-was-5times-faster.html

Regards,

SK Options Trading www.skoptionstrading.com

20 April 2011
SK OptionTrader Update: Gold Hits Our $1500 Target Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. Short SLV May 21 '11 $37/$36 Vertical Put Spread @ $0.26 Net Credit (10% Allocated) Opened 8th April 2011. Short GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Opened 13th April 2011. This leaves 30% of our portfolio in cash Gold reached an all time high of $1500.50 during the last trading session, achieving our $1500 target. Some readers may recall that we made a special offer during January that anyone who subscribed for a year would get their money refunded if gold did not reach $1500 in 2011. This money is now nonrefundable. In terms of market action gold is in break out mode and we think this rally will continue. This week has seen consistent buyers of 1520-1550 calls in May and June and the buyers are coming back in force on dips. We think gold could pop through $1500 to $1520 this week; however with May options expiration on April 26th, right after the Easter holidays, trading will be thin and swings both ways should be expected. With regard to our current positions we may look to offload our $145 GLD calls this week. This does not reflect a change in our view on gold merely that these options are now in the money and so offer less leverage to the upside. As of the close these two trades are up 20% and 44%. We will most probably hold our $155 and $150 June calls through the Easter break, but we will be looking to exit these trades in the next couple of weeks as their expiration grows closer and their Theta (decay of time premium) accelerates.

Regards,

SK Options Trading www.skoptionstrading.com

18 April 2011
SK OptionTrader Update: GLD Spreads Expire for 16% Profit, Call Options Perform Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Short GLD Apr 16 '11 $131/$130 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 15th March 2011. Closed 14th April 2011 for 16% profit. Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. Short SLV May 21 '11 $37/$36 Vertical Put Spread @ $0.26 Net Credit (10% Allocated) Opened 8th April 2011. Short GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Opened 13th April 2011. This leaves 30% of our portfolio in cash.

Our short position on the GLD Apr 16 '11 $131/$130 Vertical Put Spread expired on Friday worthless and therefore we have banked a 16% return on this trade on 31 days. This is a bit of landmark for the service since it is our 51st consecutive trade closed a profit. So we are enjoying quite a run with 51 winners in a row and overall with 68 of our 70 trading signals being closed at a profit we are very happy with our performance thus far. With respect to our current positions, we are going to continue to hold our spread positions on GLD, SLV and SPY since they are all performing well and we see no reason to change our positions. We would like to add to our SLV long position on weakness and perhaps buy some SLW calls, but we will not chase silver and if it continues to run then we will have to be content with the position we currently have. However our main focus at present is in our large position in GLD June call options. For some time we have been frustrated by the underperformance of calls during this rally. This was mainly due to the rise in gold occurring in a gradual manner, therefore there was a reduction in implied volatility and this decreases the price of options. However trading in the options market on Friday gave some hints that this situation may be about to change. Whilst we have seen out of the money call options being sold heavily in the past couple months, on Friday, bids came flooding once gold touched $1480. Buying was particular centred on the $1500$1550 strikes in May and June. Since we are long the equivalent of $1500-$1550 June calls via our position in GLD this was very positive news for our positions. What we think is happening in the market is this: Whilst gold has been rising gradually, larger players have been happy to sell the calls with strikes around and above $1500, figuring even if gold does continue to rise it probably wouldnt get all the way to $1500 in such a short period of time, those calls would expire worthless and they could keep the premium they received from selling calls. Now that gold is trading less than $20 from that level those who are short are probably getting quite concerned, hence they have been coming in to cover their shorts. But they are not the only buyers. With gold making headlines and breaking out to new all time highs almost each day, fresh interest in coming in from investment funds. These funds have been competing with the shorts to buy calls and therefore we are seeing calls being bid up substantially. However we have not yet seen serious selling in puts to counterbalance the increase in call values, so we think this will come in shortly.

In fact both call buying and put selling will likely leap up again once $1500 is broken, hence why we are short GLD put spreads and long GLD calls. This is another psychological level that will create headlines and interest in gold. Where gold could run to past $1500 is difficult to say and any prediction made can be little more than a guess as we are in unchartered territories now. However we will strive to keep our feet firmly on the ground and will become more cautious once $1500 is breached, since that was our target for gold in 2011. Once this target is reached we will have to reevaluate our stance and determine whether another price target on gold is required and if so at what level. We are going to hold our GLD calls for now, but will be looking to exit in the next couple of weeks simply because the Theta (decay of time premium) on these options will be accelerating greatly as the June expiration date draws closer. We will most probably insert stops on some of our open positions this week, particularly if $1500 is hit and our trades move into substantial profit, however more details on this will follow in a separate update.

Regards,

SK Options Trading www.skoptionstrading.com

14 April 2011
SK OptionTrader Trading Signal: Sell GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Short GLD Apr 16 '11 $131/$130 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 15th March 2011. Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. Short SLV May 21 '11 $37/$36 Vertical Put Spread @ $0.26 Net Credit (10% Allocated) Opened 8th April 2011. Short GLD May 21 '11 $137/$136 Vertical Put Spread @ $0.17 Net Credit (10% Allocated) Opened 14th April 2011. This leaves 20% of our portfolio in cash

We hereby signal to Sell GLD May 21 '11 $137/$136 Vertical Put Spreads for a $0.17 Net Credit with 10% allocated to this trade. This trade involves selling the $137 puts and buying the $136 puts.

Regards,

13 April 2011
SK OptionTrader Update: Expiration of GLD Put Spread Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Short GLD Apr 16 '11 $131/$130 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 15th March 2011. Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. Short SLV May 21 '11 $37/$36 Vertical Put Spread @ $0.26 Net Credit (10% Allocated) Opened 8th April 2011. This leaves 30% of our portfolio in cash.

This is simply a brief note regarding our GLD Apr 16 '11 $131/$130 Vertical Put Spread position. The spread has narrowed to near zero and will most probably expire worthless this week, which means we will realise a 16% profit on this trade. We intend to hold the position until expiration. We will be looking to redeploy the cash from this trade in a similar GLD vertical put spread shortly. We still think that the downside risk for gold is limited relative to the upside potential and we are standing by our prediction of $1500 gold in the next few weeks. Whilst call options have so far underperformed in this move up, we could see some heavy buying coming in once $1500 is hit. There have been large sellers of these out of the money calls who will need to cover should their options look like moving into the money. If this scenario is realised in the coming weeks we will look to offload our GLD call option positions since we do not want to be holding them for the final month or so before expiration when the Theta (decay of time premium) is largest. We would look to add to our long position on silver on weakness. We are holding our SPY position for now. We have a long term view that US Treasury yields are far too low. Therefore we may look to take a short position on US Treasuries again if the market provides an attractive entry point.

Regards,

SK Options Trading www.skoptionstrading.com

9 April 2011
SK OptionTrader Trading Signal: Sell SLV May 21 '11 $37/$36 Vertical Put Spread @ $0.26 Net Credit (10% Allocated) Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Short GLD Apr 16 '11 $131/$130 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 15th March 2011. Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. Short SLV May 21 '11 $37/$36 Vertical Put Spread @ $0.26 Net Credit (10% Allocated) Opened 8th April 2011. This leaves 30% of our portfolio in cash.

We hereby signal to Sell SLV May 21 '11 $37/$36 Vertical Put Spreads for a $0.26 net credit with 10% allocated to this trade. This trade involves selling the $37 puts and buying the $36 puts. The maximum profit on this trade is 26%.

Regards,

SK Options Trading www.skoptionstrading.com

8 April 2011
SK OptionTrader Update: Gold & Silver Options Strategy Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Short GLD Apr 16 '11 $131/$130 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 15th March 2011. Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. This leaves 40% of our portfolio in cash. Having closed our short position on US Treasuries in the last trading session for a 15% gain in 17 days, and with another position due to expire next week, we are now looking to put our cash to working in new trades. Firstly let us say that appears to have been a significant change in the gold options market. Instead of gapping higher on breakouts the yellow metal is content to rally in a gentle orderly fashion and this has led to heavy offering/selling of volatility; particular through call selling. Obviously this does not bode well for our holdings in GLD calls and they have underperformed in this move up. Let us give a brief overview of the mechanics at play here. When rallies occur in an orderly fashion, investors who are long the underlying like to sell out of the money call options and collect the premium when they expire worthless; effectively giving themselves a dividend on their investment. When rallies are sharp, call selling is less prevalent as investors want to hold the underlying since the larger capital gains will most likely offer a greater return than selling covered calls. If gold does not gap higher then calls options will continue to be heavily offered and will therefore underperform on the upside. With that in mind we are tweaking our trading strategy going forward. Whilst we will keep our GLD calls for now, since there is still a chance gold could gap sharply higher, for new positions we are going to aggressively sell vertical put spreads as an alternative to buying calls. This makes more sense from a risk-reward perspective if gold is going to climb in a orderly fashion, since vertical put spreads are short vega, ie they benefit from a decline in volatility. They are also short theta, ie they appreciate in value as time passes, all else held constant, which is a very attractive quality. So we will be looking to deploy some of our 40% cash allocation into these types of trades, both on GLD and SLV, targeting May expirations and strikes around $140-$137 and $37-$34 respectively. We will post full details on the trades when we place them, but it is hard for us to say in advance exactly what the trade will involve as the options market is rapidly changing so we will use our best judgement during the trading session in deciding which spreads to sell. We remain very bullish on silver and gold and believe gold will hit $1500 very soon, within weeks. Our plan for our current GLD and SPY puts spreads are to hold them to expiration.

Regards,

SK Options Trading www.skoptionstrading.com

8 April 2011
SK OptionTrader Trading Signal: Close TBT Apr 16 '11 $35/$34 Vertical Put Spread @ $0.01 Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Short GLD Apr 16 '11 $131/$130 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 15th March 2011. Short TBT Apr 16 '11 $35/$34 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 21st March 2011. Closed at $0.01 7th April 2011. Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. This leaves 40% of our portfolio in cash.

We hereby signal to close our short position on US Treasuries, and we have bought have the vertical put spread we sold at $0.16 for $0.01. This trade has given us a 15% return in 17 days. As we have previously mentioned, this does not reflect a change in our view on the US bond market. This merely means we do not think it is worth holding out for an additional 1% profit since there is still a significant event risk to the position. Event risk would entail risks such as the Japanese earthquake, a unpredictable event that caused a sharp rally in Treasuries in a flight to safety, which would hit our position particularly hard since the put spread we have sold is on a 200% inversely leveraged fund. Regards,

SK Options Trading www.skoptionstrading.com

6 April 2011
SK OptionTrader Update: Gold Breaks Out To A New All Time High Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Short GLD Apr 16 '11 $131/$130 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 15th March 2011. Short TBT Apr 16 '11 $35/$34 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 21st March 2011. Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. This leaves 30% of our portfolio in cash The key resistance for gold at $1440 was broken today and gold shot higher reaching as high as $1457 before retreating slightly to $1453 currently. In the options market, whilst there were a fair amount of volatility sellers in the early part of the trading session, these all but disappeared once we broke $1440. We also saw relatively little interest in puts once $1440 broke and decent buying of calls, particularly for June calls with strikes around $1500. This implies that traders are wary of being short gold now that it has broken out and adds weight to the argument that we could see a significant rally from here. Now that gold has broken above $1440 we are even more confident that our $1500 target will be hit in the short term. On the 2nd of March we wrote to subscribers saying that gold should rally past $1500 in the next couple of months and we stand by that statement; we think gold will reach $1500 in the next month if not sooner. In fact we could rally strongly through the rest of this week and with that in mind we are holding our GLD call options. We will look to sell the $145 calls should GLD move up to $145, and if we do gap substantially higher we will look at offloading some of our other positions as well. However for now we are content to hold. We will hold our GLD vertical put spread until expiration. We are going to hold our SPY vertical put spread position, which is currently 5% up, as we think US equities will continue to rally. We may look to close out our TBT trade, which is currently up 14% and has a max profit of 16%, if the spread should narrow to 0.01. This does not reflect a change in our view on the US bond market. This merely means we do not think it is worth holding out for an additional 1% profit since there is still a significant event risk to the position. Event risk would entail risks such as the Japanese earthquake, a unpredictable event that caused a sharp rally in Treasuries in a flight to safety, which would hit our position particularly hard since the put spread we have sold is on a 200% inversely leveraged fund.

Regards,

SK Options Trading www.skoptionstrading.com

1 April 2011
SK OptionTrader Update: SPY and TBT Trades Perform, Gold Yet To Shine Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Short GLD Apr 16 '11 $131/$130 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 15th March 2011. Short TBT Apr 16 '11 $35/$34 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 21st March 2011. Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. This leaves 30% of our portfolio in cash Our SPY and TBT positions appear to be performing well, with equities rallying since we signalled to sell SPY May 21 '11 $126/$125 Vertical Put Spreads and Long Term Treasuries selling off since we signalled to sell TBT Apr 16 '11 $35/$34 Vertical Put Spreads. Our TBT position is up about 11% and the SPY trade up about 2%. However the SPY trade will really begin to perform soon with the Theta effect accelerating as the options draw closer to expiration. As a reminder these Vertical Put Spreads are short Theta; they benefit from the decay of option time premium. With our gold positions, the GLD Vertical Put Spreads are doing well, up 14%, however our call options have suffered due to the fact that they are long Theta and their value has declined since we purchased them. At this point it would need a large move upwards in gold to recover this loss. A crude example would be that a $50 move higher in gold over the next 10 ten days would double the price of our $155 calls (assuming no change in implied volatility) and have similar effects on the $145 and $150 calls too. Do we think a $50 move in gold is possible over the next 10 days? Of course it is possible. Do we think it is likely? Whilst a $50 move is perhaps unlikely, if gold can break about $1445 this could ignite a serious rally and a significant move should be expected. Whilst only time will tell if gold can break this resistance level, the apparent ascending triangle formation on gold is inherently bullish and we will watch for a breakout to the upside. A basic chart is attached to illustrate this point. Perhaps the Non-farm payroll data will provide gold with a push to get through the resistance at $1440-$1445. Whilst a good payroll number should bode well for our trades on the S&P and US Treasuries, the effect of NFP on gold is usually somewhat of a lottery. However since we view the technical situation as being bullish we would speculate that the next move in gold is higher, not lower. With that said we will hold our GLD calls and look to sell more GLD vertical put spreads should gold weaken. Looking to silver we would like to take a long position soon, since if gold moves higher silver will likely follow (if not lead) by rallying. We would prefer to do this via a position that was short Theta, perhaps by selling a just out of the money vertical put spread, rather than by purchasing call options, since we already have a large exposure to Theta via our GLD calls. Most likely it would end up being a combination of both though.

Regards,

SK Options Trading www.skoptionstrading.com

29 March 2011
SK OptionTrader Update: Sell SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Short GLD Apr 16 '11 $131/$130 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 15th March 2011. Short TBT Apr 16 '11 $35/$34 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 21st March 2011. Short SPY May 21 '11 $126/$125 Vertical Put Spread @ $0.18 Net Credit (10% Allocated Opened 28th March 2011. This leaves 30% of our portfolio in cash.

Following from our recent update, we are taking a long position in US equities and hereby signal to Sell the SPY May 21 '11 $126/$125 Vertical Put Spread at $0.18 with 10% of our capital allocated to this trade. This involves selling the $126 puts (which we sold at $1.61) and buying the $125 puts (which we bought at $1.43), resulting in a net credit of $0.18.

Regards,

SK Options Trading www.skoptionstrading.com

28 March 2011
SK OptionTrader Update: US Equities Set To Rally Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Short GLD Apr 16 '11 $131/$130 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 15th March 2011. Short TBT Apr 16 '11 $35/$34 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 21st March 2011. This leaves 40% of our portfolio in cash.

Trading in US equities last week produced some positive technical signals in our opinion and therefore we intend to take a long position on the S&P 500 this week. We are not being very aggressive with this trade, looking to sell vertical put spreads on SPY, either in May with strikes of $126/$125 or in April with strikes of $128/$127; we will of course send out full details when we confirm the trade. We will try and sell these spreads at attractive prices, however if that is not possible we will not chase the market and be content to let this opportunity pass if we cannot find suitable trades that fit our risk/reward criteria. On the fundamental side the stock market continues to rally on good news and often even on not so good news. There is a lot of momentum behind this rally which to us indicates that the S&P should be able to challenge 1350 in the short term. Whereas the start of this move was mainly driven by QE2, now the stock market is still managing to rally despite there not being much chance of a QE3. This shows core strength in the market which is backed by the continually strong economic data we are seeing from the US. With regard to current positions; we are happy to hold both our GLD calls and vertical put spreads for now and we would look to close our TBT position should the spread narrowed to 1 or 2 cents (it closed on Friday at around 8 cents, we sold it at 16, so we are 8% up at the moment ). We would also look to pick up a long silver position and add to our GLD vertical put spreads on weakness. As a side note following on from our update last week entitled Eurozone Is Too Quiet, we are surprised recent events in Europe have not got more coverage by the media. There is talk of bond haircuts (read defaults) in Ireland, which has sent 2 year Irish bonds around 800bp higher than their German counterparts as of Fridays close; the highest level since the start of this whole crisis. In addition to this, Portugals government has collapsed and there is hardly any liquidity in their bonds, which have been downgraded and can no longer be used in repo deals with many firms. Perhaps the market is right and these issues are not as serious as we perceive them to be. However we think this situation is indeed serious and therefore we are treading with caution and are sticking to our long gold position, combined with a non-aggressive short of US Treasuries and a moderate long position in equities that we hope to acquire this week.

Regards,

SK Options Trading www.skoptionstrading.com

24 March 2011
SK OptionTrader Trading Signal: Sell SLV Jul 16 '11 $40 Calls @ $1.65 Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Long SLV Jul 16 '11 $40 Calls @ $1.19. (5% Allocated) Opened 10th March 2011. Sold @ $1.65 23rd March 2011. Short GLD Apr 16 '11 $131/$130 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 15th March 2011. Short TBT Apr 16 '11 $35/$34 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 21st March 2011. This leaves 40% of our portfolio in cash.

We hereby signal to sell our position in SLV Jul 16 '11 $40 Calls at $1.65. Having bought at $1.19, we are banking a profit of 38.66% on this trade in 13 days. We are still bullish on silver, we simply aim to re-purchase a silver long position at more attractive levels in the near future.

Regards,

SK Options Trading www.skoptionstrading.com

23 March 2011
SK OptionTrader Update: Eurozone Is Too Quiet Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Long SLV Jul 16 '11 $40 Calls @ $1.19. (5% Allocated) Opened 10th March 2011. Short GLD Apr 16 '11 $131/$130 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 15th March 2011. Short TBT Apr 16 '11 $35/$34 Vertical Put Spread @ $0.16 Net Credit (10% Allocated) Opened 21st March 2011. This leaves 35% of our portfolio in cash.

We have been discussing for some time as to what could be the catalyst to fire gold to $1500, and whilst the situation in the Middle East has certainly contributed to the recent rise in gold prices, there could be another catalyst ready to spark a safe haven rally in gold prices. Sovereign debt troubles in the Eurozone have caused several rallies in gold over the past year, first with the Greek crisis, then again with Ireland and once more with Portugal. However the solutions that ended these crises were in our opinion little more than band aid quick fixes, and the reality is that the underlying situation of many of these debt ridden countries is still dire. Even if one disregards these issues as long term problems, there are a number of factors that could still spell trouble in the short term. Although it has escaped the headlines so far due to the situation in Japan and Libya, Irish 2 year bond yields at now at a massive 10.125%. During the Irish debt crisis in November they were below 7%. Irish 10 year bond yields are now at around 9.8%, compared with 9% just a few months ago. We have seen a massive bear flattening in the Irish bond yield curve, with 2s10s (the difference between the yield on 10 year bonds and 2 year bonds) going from roughly +4pts at the beginning of 2011 to -0.312 now; this only makes the situation worse since it makes it more expensive for Ireland to repay its debts. The is the market saying that Irish debt is more risky that it was just a few months ago, in other words the situation is worse than the market previously thought. The fact that the carnage has spread to Irish 2 year bonds is particularly worrying as it could soon affect the countrys ability to finance itself in the short term. On top of this we have the ECB looking ever more likely to raise interest rates and with 80% of Irish mortgages being variable rates tracking the ECB rate, this is going to make it harder for homeowners who are already stretched to make repayments. Also at the end of this month bank stress tests are due in Ireland and Irish bank shares have remained under pressure. If the stress test results are poor then we could see a large sell off in Irish bank shares and CDS (credit default swaps) on those banks spike higher. It is likely that Irish government CDS will also spike higher in the short term, given how the bond market is already reacting. This situation is indeed worrying and further enforces our will to hold on to our GLD calls. We also have an austerity vote in Portugal which should pass, but there is a chance it will not and if it doesnt then results could be disastrous; particularly with Portuguese 10 year government bonds already yielding around 7.5% (again higher than November).

All things considered, due to the asymmetric payouts associated with the positive and negative scenarios unfolding, the best risk reward is to be found being in a position to benefit from things getting worse before they get better. If things take a turn for the worse in the short term, they will get very bad, very quickly, but on the positive side they can only get moderately better. We believe we are in a position to benefit from this with our long gold trades. Our short trade on US Treasuries is not ideal, since Treasuries could be bought as a safe haven asset by investors fleeing from European debt. We will keep the trade on our books though, since the trade is structured in a way that it will remain profitable should Treasuries rally moderately, stay flat or sell off. Plus we are short long term Treasuries, whereas the majority of safe haven panic buying would likely be concentrated at the short end. As always we will watch all positions closely and keep our subscribers updated should we have a change in opinion.

Regards,

SK Options Trading www.skoptionstrading.com

22 March 2011
SK OptionTrader Trading Signal: Sell TBT Apr 16 '11 $35/$34 Vertical Put Spread @ $0.16 Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Long SLV Jul 16 '11 $40 Calls @ $1.19. (5% Allocated) Opened 10th March 2011. Short GLD Apr 16 '11 $131/$130 Vertical Put Spread @ $0.16 (10% Allocated) Opened 15th March 2011. Short TBT Apr 16 '11 $35/$34 Vertical Put Spread @ $0.16 (10% Allocated) Opened 21st March 2011. This leaves 35% of our portfolio in cash.

Further to notice in our previous update, we hereby signal to Sell TBT Apr 16 '11 $35/$34 Vertical Put Spread at $0.16 with 10% allocated to this trade.

Regards,

SK Options Trading www.skoptionstrading.com

21 March 2011
SK OptionTrader Update: Gold, USD and US Treasuries Trade Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Long SLV Jul 16 '11 $40 Calls @ $1.19. (5% Allocated) Opened 10th March 2011. Short GLD Apr 16 '11 $131/$130 Put Spread @ $0.16 (10% Allocated) Opened 15th March 2011. This leaves 45% of our portfolio in cash

We have just published an article on the statistical relationship between precious metals and the USD Index, which can be found here:http://www.skoptionstrading.com/updates/2011/3/20/why-gold-is-nolonger-an-effective-usd-hedge.html Let us clarify that the purpose of this article was to show that the inverse relationship between gold and the USD is no longer as strong as it was, we are not saying that the relationship no longer works. We would fully expect gold to rise if the USD index fell lower, and indeed such a scenario could indeed unfold over the next few weeks. Our main message is that gold is no longer as effective as a USD devaluation hedge. With regard to our trading strategy this week we intend to hold all our current precious metal related positions, but would look to take profits if gold or silver spiked higher. We are also planning to take a short position on US treasuries. We hold the view that the recent rally in US treasuries has run its course and yields going out past 5 years are set to rise. With this in mind we intend to sell vertical put spreads on TBT (Proshares Ultrashort 20+ Year Treasury) and PST (Proshares Ultrashort 7-10 Year Treasury) this week, targeting April or May expirations. This will result in a short position since they are both inverse treasury ETFs. The trades should book a modest profit if the US treasury market falls or goes sideways in the next month or so. Placing this trade will very much depend on how the options on these instruments are trading this week and we will only sell these spreads if we think that the spreads on offer make sense from a risk reward perspective.

Regards,

SK Options Trading www.skoptionstrading.com

18 March 2011
SK OptionTrader Update: UN Votes for Libyan No Fly Zone Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Long SLV Jul 16 '11 $40 Calls @ $1.19. (5% Allocated) Opened 10th March 2011. Short GLD Apr 16 '11 $131/$130 Put Spread @ $0.16 (10% Allocated) Opened 15th March 2011. This leaves 45% of our portfolio in cash The UN Security Council has just voted to impose a no-fly zone over Libya and says it is prepared to take all necessary measures to protect civilians. We will not go into details of the vote nor its political implications as they can be found elsewhere, but simply give a brief outline of how we see this affecting the market and our positions in particular. Most importantly this vote and any consequential military intervention serves as a reminder that just because there was a horrific disaster in Japan, that doesnt mean the troubles in the Middle East and North Africa have gone away. This could see a resumption of the safe haven buying that we saw in gold prior to the Japanese earthquake when the Libyan crisis was still front page news. We have received a number of enquiries as to why gold did not rally on news of the disaster in Japan, since it is a safe haven asset. Whilst it is true that gold is usually bought during bad times it is important to remember that the gold market contains many speculative traders, not just safe haven investors. The speculative traders were squeezed, perhaps by other positions that they had in other markets affected by the quake, so gold took a tumble. However the speculative positions in gold are now at a relatively low level, which means that there are not a massive amount of long positions that can be closed and so we see the downside to be limited from here. With that in mind we are going to hold our GLD call options and our vertical put spread, and possible add to that put spread position should gold weaken further. However given the set back our position has taken from the Japanese quake, we will be looking to exit them sooner than previously planned. This is mainly because our forecast for gold prices has been pushed back slightly and we do not want to be exposed to too much Theta (decay in the time premium of our call options) as they get closer and closer to expiration. We are not close to giving sell signals on them just yet, but when gold approaches $1440 we will be looking to take some money off the table. A similar strategy applies to our lone SLV call. We have said for a why that it will take a decent catalyst to push gold up to $1500 and perhaps Libya is it. Two other candidates are; a re-emergence of the EU sovereign debt troubles (an area which has been very quiet lately), and another is the possibility of a QE3 somewhere down the line. Whilst a QE3 is still unlikely, the probability of more quantitative easing has greatly increased in the last fortnight as equities have plunged. We will have to wait and see how this pans out, but at this point risk reward dynamics still favour being long gold. As a side note: You may have read elsewhere that we are raising our prices effective April 2nd in an attempt to limit our numbers and ensure that we continue to provide a high quality service. A 6 month subscription will increase from $99 to $199 and a 12 month subscription will increase from $179 to $350. This will not affect current subscribers. Only new subscribers will be affected. Even if your credit card expires, if we have your email address on our records provisions will be made so that you can re-subscribe at the original rate.

Regards,

SK Options Trading www.skoptionstrading.com

16 March 2011
SK OptionTrader Trading Signal: Sell GLD Apr 16 '11 $131/$130 Put Spread @ 0.16 (10% Allocated) Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Long SLV Jul 16 '11 $40 Calls @ $1.19. (5% Allocated) Opened 10th March 2011. Short GLD Apr 16 '11 $131/$130 Put Spread @ $0.16 (10% Allocated) Opened 15th March 2011. This leaves 45% of our portfolio in cash We are taking advantage of this drop in gold and hereby signal to Sell GLD Apr 16 '11 $131/$130 Put Spreads at $0.16 with 10% allocated to this trade. We are holding all other positions. Regards,

SK Options Trading www.skoptionstrading.com

14 March 2011
SK OptionTrader Update: Selling GLD Put Spreads Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Long SLV Jul 16 '11 $40 Calls @ $1.19. (5% Allocated) Opened 10th March 2011. This leaves 55% of our portfolio in cash. Last week saw volatility being sold in the options market whenever gold headed lower, whilst it was bought when ticked higher. This fits with our view that volatility will increase during this move upwards, since we are of the opinion that both volatility and gold itself will increase in the coming weeks, which is why we have a large position in GLD call options. We may have to sit tight for a while, as gold could stay range bound this week, but we remain confident that we will see a substantial move up in the next month or so and we will turn a decent profit on our call options. Our trading strategy for this week is to hold our GLD calls, but take some bullish credit spread positions on GLD to compliment this position and put some of our 55% cash allocation to work. This will probably involved selling the April 132/131 put spread. We would buy SLV calls again on weakness in silver, however if it continues to rise we will not chase it. In fact if our silver position (which is currently up about 22%) continues to appreciate we will be looking to place a stop order in an attempt to lock in some gains.

Regards,

SK Options Trading www.skoptionstrading.com

11 March 2011
SK OptionTrader Trading Signal: Buy SLV Jul 16 '11 $40 Calls @ $1.19 (5% Allocated) Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. Long SLV Jul 16 '11 $40 Calls @ $1.19. (5% Allocated) Opened 10th March 2011. This leaves 55% of our portfolio in cash. We hereby signal to Buy SLV Jul 16 '11 $40 Calls at $1.19 with 5% allocated to this trade.

Regards,

SK Options Trading www.skoptionstrading.com

10 March 2011
SK OptionTrader Update: Calm Before The Storm? Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. This leaves 60% of our portfolio in cash. The last few days have been fairly quiet with regard to options trading in the silver and gold markets, so we have refrained from writing an update this week as there really hasnt been much to say. We will however make a few brief comments now, as this market never stays quiet for long and it is possible that we are seeing a period of calm before a storm so to speak. Volatility has been sold each day this week, with calls being especially well offered across the board but particularly in May 2011. It will probably take a move above $1443 on gold, ie to a new high, before volatility comes in bid again and we begin to see a decent move up in our calls. We are still bullish on gold and silver; the breakout in gold still holds and we maintain that our $1500 target could be met in the next month or two. We will be keeping our GLD calls and looking to buy some silver calls on weakness, aiming to at least have some position in silver soon. We will also look at selling some GLD put spreads so that the cash in our model portfolio is put to some use. Thats all for now, we will send out another update if market action warrants one, if not our next update is due over the weekend.

Regards,

SK Options Trading www.skoptionstrading.com

4 March 2011
SK OptionTrader Update: Gold Retreats, Volatility Sells Off Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. This leaves 60% of our portfolio in cash. Our position took a double hit in trading today, from a slight sell off in gold but also in volatility. Although volatility was sold across the board, the most selling was happening the April and June calls with strikes around $1500 the options we are buying. This was mainly down to profit taking from those who have been long these calls for the last couple of weeks and were sitting on nice profits. The market will focus on US payrolls tomorrow; another strong number will put another nail in the coffin of any hopes of a QE3. These payrolls are always somewhat of a lottery, so we will not attempt to make a prediction of what the market will do post payrolls, just be prepared for some swings both ways. That probably does it for our position in June GLD calls, we will not be signalling any further buys for these contracts. Provided gold holds up around these levels for the week we remain comfortable with our current open trades. We may sell some OTM April put spreads in the next trading session, simply to try and cushion the negative theta position we are currently running by being long so many call options. These will not be particular aggressive positions; the strikes will be below $135 targeting perhaps a maximum 10-15% gain.

Regards,

SK Options Trading www.skoptionstrading.com

4 March 2011
SK OptionTrader Trading Signal: Buy More GLD Jun 18 '11 $155 & $150 Calls (5% allocated to each) Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $155 Call @ $1.20. (5% Allocated) Opened 3rd March 2011. Long GLD Jun 18 '11 $150 Call @ $1.72. (5% Allocated) Opened 3rd March 2011. This leaves 60% of our portfolio in cash.

Gold has retreated a few bucks so we are going to add to our position on GLD calls. We hereby signal to buy GLD Jun 18 '11 $155 Calls at $1.20 with 5% allocated to this trade. We hereby signal to buy GLD Jun 18 '11 $150 Call at $1.72 with 5% allocated to this trade.

Regards,

SK Options Trading www.skoptionstrading.com

3 March 2011
SK OptionTrader Trading Signal: Buy GLD Jun 18 '11 $155 & $150 Calls (5% allocated to each) Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $155 Call @ $1.46. (5% Allocated) Opened 2nd March 2011. Long GLD Jun 18 '11 $150 Call @ $2.23. (5% Allocated) Opened 2nd March 2011. This leaves 70% of our portfolio in cash. We hereby signal to buy GLD Jun 18 '11 $155 Calls at $1.46 with 5% allocated to this trade. We hereby signal to buy GLD Jun 18 '11 $150 Call at $2.23 with 5% allocated to this trade. Regards,

SK Options Trading www.skoptionstrading.com

2 March 2011
SK OptionTrader Update: Gold Breaks Out, Eyes $1500 Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. This leaves 80% of our portfolio in cash. Having closed above $1425, gold appears to have broken out and could now run to $1500. Whilst we need a second close above $1425 to confirm this breakout, we are confident enough to warrant adding to our long positions in the next trading session. We will be targeting OTM GLD calls, looking at June 2011 expiration with strikes above $150, most probably $150 & $155. We intend to close our current position in the $145 calls when GLD reaches $145, in favour of calls with higher strikes that are therefore more leveraged to the gold price. In addition to the breakout above $1425, the weekly Bollinger Bands are looking very bullish for gold. The attached chart shows weekly gold with its Bollinger Bands and we have overlaid the BB width to further demonstrate our point. These bands (a measure of volatility) often tighten before a rally and at recently they have tightened considerably, having just now turned wider. If we are correct in our interpretation of these signals, gold should rally past $1500 in the next couple of months. In fact, $1500 is our most conservative estimate; $1550+ is more where we are expecting gold to go, however we will err on the side of caution. Two consecutive closes below $1425 could cause us to change our view. However as things stand we are still bullish and eager to deploy the cash in our portfolio, which currently sits at 80%. We are aiming to reduce our cash allocation to below 50% be the end of the week. We will look at SLV calls once we get gold having a second close above $1425 and this breakout is confirmed.

Regards,

SK Options Trading www.skoptionstrading.com

26 February 2011
SK OptionTrader Update: Gold Volatility About To Jump Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. This leaves 80% of our portfolio in cash. A generally risk off tone was present in the market this week, with equities falling and treasuries rallying on the back of concerns over Libya and the stability of the Middle East region. This of course saw gold prices rising significantly, however they have yet to beat the resistance at $1425. We are seeing a number of bullish signs in gold, but we need to see the breakout before becoming aggressively long. The first positive sign is a fall in US real interest rates, which have a negative correlation with gold prices. Yields on US 10 year TIPS closed at 1.02%, having fallen from 1.39% just a couple of weeks ago. If US real rates continue to fall then gold could be pushed significantly higher, another 40bps drop would possibly push gold past $1500. For some background on the relationship between US real rates on gold please see this article: http://www.skoptionstrading.com/updates/2010/12/5/the-keyrelationship-between-us-real-rates-and-gold-prices.html Secondly, another bullish sign is troubles in the Middle East. Whilst the vast majority of the troubles are affecting the energy markets, there is a spill over effect to gold as part of its safe haven role. This effect will be larger if the situation becomes more serious and this may well be the catalyst to drive gold prices higher that we have been trying to find for some time. Thirdly the action in the options market is giving bullish signs and close to perhaps signalling that $1500 could be just a month or two away. Volatility, perhaps the most important factor in options pricing, looks like it could be preparing for a jump. Weekly Bollinger bands on gold have been tightening, as they often do before a large move. Of course this move doesnt have to be upwards, but we feel the fundamentals support a move higher rather than lower. Our plan of action is as follows. We intend to sell April 130/ 129 put spreads, aiming for a modest 10%-15% gain in a couple of months. But the trade could possibly be closed earlier if gold rallies and the spread narrows significantly. We intend to buy OTM GLD calls and OTM SLV calls should gold break out above $1425. We are well aware that silver has already broken out but we want to see this breakout confirmed by gold. We will probably be looking at June 2011 to September 2011 calls. As a side note, we would like to share with readers some chatter we have been hearing about silver in the last week. This chatter has come from a friend who does not work in the investment industry and another who is an equities investor through and through. Neither had ever mentioned anything about precious metals in the good few years we have known them. In separate conversations with both of them, they were both very eager to tell us what a good investment silver is and why it was going to $100/ounce. This has set alarm bells ringing in our heads as once the herd begins to think silver is a great investment, it is probably prudent to sell. Whilst we do not think we are in bubble territory yet, this anecdote should serve as a warning that such a scenario is possible and we must stay vigilant to ensure we are not caught up in the euphoria of this bull market.

Regards,

SK Options Trading www.skoptionstrading.com

19 February 2011
SK OptionTrader Update: Bullish Put Spread Expires for 13% Profit Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Short GLD Feb 19 '11 $128 Put @ $0.71/Long GLD Feb 19 '11 $127 Put @ $0.58. Net Credit $0.13. (10% allocated) Opened 19th January 2011. Closed for 13% Profit. This leaves 80% of our portfolio in cash. The February put spread that we sold at $0.13 expired today, with both legs expiring out of the money and therefore we get to keep the $0.13 and make a 13% profit on the trade. As we have previously stated, we intend to sell similar spreads with March expirations and will probably begin selling these next week. What was most interesting about todays options trading was the leap up in our call options, and indeed in implied volatility across the volatility curve. As a reminder in our last update we said: Volatility continues to be well offered across the gold options market, and this is having a dampening effect on the performance of our call options. Our $150 GLD calls should have gained about 10 cents today, yet they only managed a 5 cent gain. Our $145 calls should have been up about 20 cents, but were only up 10 cents. The explanation for this is that implied volatility (a key component is options pricing) is decreasing, reducing the value of calls and puts. We understand that a dealing bank in the gold options market was out before the open heavily dumping August volatility by selling straddles, but otherwise there is no large news to report in terms of options action, other than calls continuing to be well offered by possible trapped longs. In fact we have been voicing our concerns over how heavily offered call options have been in the last couple of weeks, hypothesising that it could be selling from trapped longs in the market. (You may wish to re-read our update Trapped Longs in the Options Market if you are a new subscriber we can forward this to you at your request) This situation is similar to what we saw in August 2010, when there were many trapped longs that needed to be shaken out before call options would really start to perform. We are now seeing the end of this period of underperformance in our gold options, with todays session seeing our $145 June calls up 18.52% and our $150 June calls up 26.37%, despite GLD increasing only 0.27%! In short, the offers were gone and the bid was back these options were merely adjusting to prices that would have been realised a few days ago if wasnt for the large sellers that have been dampening their performance. Looking to silver, it has clearly now broken out to new highs, there can be no question about that. The question is how to we play it from here. We have narrowed it down to two choices, either selling a SLV March $30/$29 put spread or buying a far OTM longer dated call option. The first choice may appear fairly conservative, but it would bring a return of over 20% in less than a month. The second trade is one that could be placed and closed within a week at the rate silver is surging upwards; particularly when one considers that the significant offer tone in precious metal options has now shifted to a more positive bid tone. We would be quite happy taking both positions if it wasnt for the fact that gold has yet to break out to a new high. With gold still below its all time high we cannot be sure that this is the start of a new major rally in precious metals. Perhaps it is more prudent to wait for gold to confirm this rally before becoming aggressively long again, since if gold stalls or fails to break $1425 then silver could snap back sharply. Silver is also overbought and still dangerously above its moving averages. Therefore if we do take a position in silver this week it will most likely be in long dated far out of the money SLV calls, so that we have a lower exposure to Theta and can ride out any volatility in the market. There are also two specific issues that have been raised by multiple subscribers that we feel obliged to address.

The first is that of the gold/silver ratio which currently sits at around 42.67. Whilst it is possible and in fact quite probable that this ratio will continue to decrease and silver will outperform gold in the short term, over the longer term we would be more cautious. For one thing, talk of this ratio going back to 16 is perhaps slightly unwarranted. Although the ratio was around this level in 1980 when gold and silver were peaking, one must remember that a great proportion of silvers rise was due to the Hunt brothers efforts to corner the market. Unless such a figure emerges again we would say that the ratio is unlikely to return to this level. Also it is worth remembering that whilst silver gets the benefit of demand for industrial use, this is a double edged sword and should economic growth stumble then silver would get sold off a lot more than gold. The second is that of backwardation in the silver futures market, we are going to explain this briefly from the basics upwards to ensure that all subscribers understand what is happening. In the silver futures market there are contracts for delivery of silver in different months. For example contracts for; March 2011, June 2012, December 2014 and so on. Usually the futures trade in contango which means the December 2014 contract will be trading at a higher price than the June 2012 contract and the June 2012 contract will be trading at a premium to the March 2011 contract. This reflects the additional storage costs to the seller of holding the silver until it is delivered at a future date. It is not a reflection of where the market thinks the silver price will be in the future. Backwardation is the opposite of this and therefore the longer dated contracts are trading at a discount to nearer term contracts. This means that people are prepared to pay a hefty premium to get their hands on silver sooner rather than later; a possible symptom of tight supply in the short term. Therefore many investors are getting excited over the fact that silver is in backwardation as it is inherently bullish in the short term.

Regards,

SK Options Trading www.skoptionstrading.com

18 February 2011
SK OptionTrader Update: Gold Volatility Continues To Decrease, Silver Breaking Out Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Short GLD Feb 19 '11 $128 Put @ $0.71/Long GLD Feb 19 '11 $127 Put @ $0.58. Net Credit $0.13. (10% allocated) Opened 19th January 2011. This leaves 70% of our portfolio in cash. Volatility continues to be well offered across the gold options market, and this is having a dampening effect on the performance of our call options. Our $150 GLD calls should have gained about 10 cents today, yet they only managed a 5 cent gain. Our $145 calls should have been up about 20 cents, but were only up 10 cents. The explanation for this is that implied volatility (a key component is options pricing) is decreasing, reducing the value of calls and puts. We understand that a dealing bank in the gold options market was out before the open heavily dumping August volatility by selling straddles, but otherwise there is no large news to report in terms of options action, other than calls continuing to be well offered by possible trapped longs. The focus in recently trading has been on silver rather than gold, as it broke to a new high a level not seen since the Hunt brothers tried to corner the market over thirty years ago. Whilst we will wait for two consecutive closes above $30.25 to confirm this breakout, things do look very bullish indeed. However a run in silver may stall if gold does not break above $1425, but if gold breaks out too then all bets are off. The silver market is very tight at present and traders have its recent rally from $19 in August to $30 in December fresh in their minds so it will take some guts to be short on silver right now. There could perhaps be some sense in wagering that far dated backwardation will end, by perhaps being short 2014 silver futures and long 2015 silver futures. Although backwardation will not last forever, it can persist for an extended period of time and therefore we would not be betting on the spread narrowing in any nearer dated futures contracts. However such trades are not the area that this service operates in, we merely mention it as a point of interest. Our strategy going forward consists of three main points. Firstly we are letting our current put spread expire; both contracts should expire worthless so we will get to keep the entire net credit. Secondly we will look to sell similar put spreads will March expiration next week. Gold is well support and has made its lows of this correction if not its lows for the year. Thirdly we will look to close out our GLD calls. This reflects our view that volatility will continue to decrease and therefore call options will underperform. We may buy calls again if gold breaks out above $1425, until then we think selling put spreads offers a better risk/reward ratio.

Regards,

SK Options Trading www.skoptionstrading.com

16 February 2011
SK OptionTrader Trading Signal: Limit Sell Order Filled on SLW Jun 18 '11 $40 Calls @ $2.75 Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. Limit sell order placed at $2.75, filled and sold. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Short GLD Feb 19 '11 $128 Put @ $0.71/Long GLD Feb 19 '11 $127 Put @ $0.58. Net Credit $0.13. (10% allocated) Opened 19th January 2011. This leaves 70% of our portfolio in cash. Our limit sell order at $2.75 has been filled and therefore our posistion in SLW Jun 18 '11 $40 Calls (5% Allocated) has been sold. Therefore our portfolio is now 70% in cash. Having purchased the posistion at $2.57 on the 7th January 2011, this gives us a modest 7% profit over about 39 days. Regards,

SK Options Trading www.skoptionstrading.com

14 February 2011
SK OptionTrader Update: Gold's Consolidation Favours Selling More Put Spreads Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. Limit sell order placed at $2.75. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Short GLD Feb 19 '11 $128 Put @ $0.71/Long GLD Feb 19 '11 $127 Put @ $0.58. Net Credit $0.13. (10% allocated) Opened 19th January 2011. This leaves 65% of our portfolio in cash. Resistance continues to persist for gold around $1365 and if the yellow metal doesnt break above this soon then the 50dma will converge on $1365 and make this level an even harder hurdle for gold to overcome. Having said that the downside for gold does look to be limited, we have most probably seen the lows of this correction. However we think that gold will consolidate in the near term, with a great deal of resistance between here and a new all time high. We continue to search for a catalyst that could drive gold up past $1425 and send it on its way to our $1500 target. Nothing of note stands out currently, but a possible pivot point could be around the end of QE2 and whether or not the Fed chooses to extend their bond buying program. If they do announce some form of QE3, this will of course be very bullish for gold. However what is less clear is how gold will fair if the quantitative easing program comes to an end. The most obvious answer is that gold will fall, since the Fed is no longer printing money and therefore there is less reason to own gold as an inflation/USD devaluation hedge. Another possible consequence is that without quantitative easing the US economy and stock market will have to stand on its own two feet, without the daily liquidity injection from the Fed. How well will equities fair without this? Will they continue on their remarkable rally or will we see a correction? A serious correction could stimulate a risk off environment where gold would see safe haven buying. We are not sure how this will pan out, but we still think a long position in gold is favourable relative to a short position on a risk reward basis. For that reason we are keeping our position in GLD June Calls. Given our view that gold is in a consolidation period and well supported, we are in favour of selling more put spreads on GLD. This is primarily since they are short Theta, so they increase in value as time passes, ceteris paribus. If we bought more call options then gold would have to rise significantly to counteract that decay in our time premium. Although we are comfortable with our current call option positions, we do not want to have any more of our portfolio bleeding Theta each day. Secondly we like selling put spreads since they are negative Vega positions, so they increase in value as volatility decreases, ceteris paribus. If gold continues to consolidate or just gently rallies, volatility will decrease. It would need a sharp spike upwards or a sudden drop lower to send volatility higher, and we do not see either of those as a likely scenario in the short term. We are also wary that that the volatility curve for gold options (a measure of ATM implied volatility in option prices relative to their expiration date) is beginning to flatten after being very steep for some time. By having a negative Vega position we can benefit as our position effectively rolls down this curve. Therefore our strategy for now is to look to take new positions similar to our current put spreads, except using options with March expirations and to hold our current call options with the view to closing them if gold strengthens towards $1400.

Regards,

SK Options Trading www.skoptionstrading.com

9 February 2011 Due to some typing errors we are resending this update. We apologise for any inconvenience.
SK OptionTrader Update: Trapped Longs in the Options Market Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. Limit sell order placed at $2.75. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Short GLD Feb 19 '11 $128 Put @ $0.71/Long GLD Feb 19 '11 $127 Put @ $0.58. Net Credit $0.13. (10% allocated) Opened 19th January 2011. This leaves 65% of our portfolio in cash. In the last trading session, we sold out of our position in SLV Apr 16 '11 $30 Calls which we had bought for $1.31. Previously we had placed a limit sell order at $1.45, however we removed this order and sold into the bid at $1.42. An 8.40% gain in 30 days is nothing too spectacular, but it is a profit nonetheless. We would however like to give a little more detail on why we exited the trade and in particular why we removed the limit sell order and decided to sell at market. Prior to exiting the trade the calls had traded at $1.44, although not in size. Despite silver and SLV rising, the call options were struggling to move as much as they "should" have. (We write "should" since trading on what should happen is not a good strategy in our opinion; all that matters is what happens in reality) Therefore it was looking increasingly likely that the calls would not reach $1.45, since they were stuck around $1.42/$1.43, and therefore our order would not get filled. We therefore decided to hit the $1.42 rather than trying to hold out for an extra three cents. Whilst normally we would not address such a situation in this much detail, we feel compelled to since it is symptomatic of something that we are seeing across the gold and silver options market. Basically, across the board calls on gold and silver appear to be very well offered. This means that every tick up is met by sellers who are eager to sell into any strength. This is probably due to a number of trapped longs, that have bought this dip and now are looking to exit so they can stop fighting the theta effect on their positions. By that description we must also count ourselves amongst those trapped longs. With this in mind our strategy going forward is two fold. Firstly we will not be buying any more call options until these trapped longs have been flushed out. We will instead look to add bullish put spreads to our portfolio on weakness, where we can benefit from time decay rather than have Theta constantly eating away at our positions. Secondly, when these trapped longs have been flushed out, we could be set for the next major rally up. A similiar situation occured in July last year. On 23rd July 2010 in an update to subscribers we wrote: This [heavy selling of gold calls on strength] could mean that there a number of "trapped longs"; i.e. there are speculative trades on out of the money futures and options, but they will be running out of patience so expect any strength in gold to be met with selling by these traders. This adds further weight to our argument that any major rally in gold will not be underway for a good few weeks. Once these sellers had been flushed out of the market, gold was ready to embark on a massive rally to $1425. Once these trapped longs had been flushed out in August we started buying call options in earnest, and profited handsomely. We intend to do the same here when the situation presents itself. $1500 gold is coming to a screen near you in 2011. However timing is everything and we are content to trade less aggressively until we think that a major rally in underway and this correction/consoldiation phase is behind us.

Regards,

SK Options Trading www.skoptionstrading.com

9 February 2011
SK OptionTrader Trading Signal: Sell SLV Apr 16 '11 $30 Calls Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLV Apr 16 '11 $30 Call @ $1.31. (5% Allocated) Opened 7th January 2011. Limit sell order placed at $1.45. Limit order removed and sold at $1.42 Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. Limit sell order placed at $2.75. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Short GLD Feb 19 '11 $128 Put @ $0.71/Long GLD Feb 19 '11 $127 Put @ $0.58. Net Credit $0.13. (10% allocated) Opened 19th January 2011. This leaves 55% of our portfolio in cash.

We are removing our limit sell order of $1.45 on the SLV Apr 16 '11 $30 Calls and selling now at market for $1.42. We bought these calls at $1.31 so we have made a 8.40% profit on this trade in 30 days. Having traded as high as $1.44 today, there now appears to be heavy selling of these calls at this level, so it is less likely that our $1.45 order will be filled today. Therefore with that in mind, and considering the fact that silver has reached our $30 short term target, we are taking our profits now. More details will follow in a later update. Regards,

SK Options Trading www.skoptionstrading.com

5 February 2011
SK OptionTrader Update: Insights On Gold From TIPS and the Options Market Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLV Apr 16 '11 $30 Call @ $1.31. (5% Allocated) Opened 7th January 2011. Limit sell order placed at $1.45. Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. Limit sell order placed at $2.75. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Short GLD Feb 19 '11 $128 Put @ $0.71/Long GLD Feb 19 '11 $127 Put @ $0.58. Net Credit $0.13. (10% allocated) Opened 19th January 2011. This leaves 60% of our portfolio in cash. The big focus for markets was the US employment report, which in our opinion did not give a clear signal. However, we will leave the detailed analysis of such reports for economists and would like to focus on how the market viewed the data. It is clear that the market took a positive view on the report, seeing the glass half full so to speak, with Treasuries selling off and equities making gains. Gold prices were relatively unchanged today, but we did see some small gains in silver. The action in the gold options market this week has been quite interesting. We have seen December 2011 calls being bought consistently with strikes between $1800-$2000, whereas $1400 calls across all months have not been as well bid. A rough translation of this is that gold may not be moving much higher soon, but when it does move the rise will be swift and sharp. This fits with our view that gold is in a correction/consolidation phase at present but will look to break much higher later this year; our initial price target is still $1500. Technical speaking there are still some hurdles to pass, the nearest of which is resistance at $1355. There is still a strong chance gold will retreat back to the $1325 level, but it is increasingly likely that we will not see new lows for 2011 any time soon. Silver has rallied back much more sharply than gold, which is to be expected since it sold of more severely during the correction. However it may struggle to overcome resistance levels at around $30 so we have placed limit sell orders on our SLW and SLV call options. We are still bullish on silver in the longer term, but if we are correct that it may take some time for precious metals to make new highs, then we do not want to be holding call options due to their negative theta (decay of the time premium). We are paying close attention to the action in US Treasuries, in particular Treasury Inflation Protected Securities (TIPS), since US real rates are inversely correlated with gold prices. A major concern for us is the fact that US real rates are rising and 10 year TIPS currently at 1.30%, which will likely cap any serious gains in gold. We will of course keep you updated as this situation progresses, but our initial reaction is that it may be some time before gold makes a new all time high; although we do expect it to achieve this in 2011. The downside should be limited by strong physical demand, for instance we understand the Chinese have been heavy buyers over the last month or so. Overall we are more in favour of selling bullish put spreads than buying outright calls at this point, as we could be going sideways for a while and we do not want to be long Theta until we anticipate a sharp and substantial move higher.

Regards,

SK Options Trading www.skoptionstrading.com

2 February 2011
SK OptionTrader Update: Support Grows For Gold Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLV Apr 16 '11 $30 Call @ $1.31. (5% Allocated) Opened 7th January 2011. Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Short GLD Feb 19 '11 $128 Put @ $0.71/Long GLD Feb 19 '11 $127 Put @ $0.58. Net Credit $0.13. (10% allocated) Opened 19th January 2011. This leaves 60% of our portfolio in cash. Gold prices appear to be firming up and we may well have seen the lows of this correction. With this in mind we are looking to add to our positions on weakness this week. Speculative longs appear to be returning to the market, with one buyer apparently picking up 2000 Dec $1800 calls; a sign that perhaps the weak hands have been shaken out of the market and buyers are returning. However there may still be a period of consolidation before gold makes new all time highs. Many subscribers have asked us for our comments on base metals, so the following is a brief overview of our current view. Out of all the industrial metals we like copper the most, owing to the fact that it has just broken out of a long term technical range and will likely get pushed higher in 2011. Fundamentally strong demand from emerging economies coupled with lower inventories and a tight supply should see prices tick higher this year. We also like copper as it is enjoying quite a high correlation with gold recently and we are very bullish on gold with a $1500 target for 2011. There is also growing investment demand, with JPMorgan preparing to launch a physically backed copper ETF. We are not as positive on Zinc, Nickel and Aluminum however. Although we expect them to remain well supported this year, we see limited upside. This is mainly due to the fact that the recent strength in these metals has been caused by a variety of factors, most of which are short term in nature. There has been zinc mine closures in China and weather related disruptions to supply from Australia for nickel and aluminum. Whilst these metals may move higher in 2011, we think copper offers the best risk-reward dynamics. This view is not set in stone though and we would review our outlook if the situation changed significantly. Regards,

SK Options Trading www.skoptionstrading.com

29 January 2011
SK OptionTrader Update: The Current Risk Reward Dynamics Of Gold Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLV Apr 16 '11 $30 Call @ $1.31. (5% Allocated) Opened 7th January 2011. Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Short GLD Feb 19 '11 $128 Put @ $0.71/Long GLD Feb 19 '11 $127 Put @ $0.58. Net Credit $0.13. (10% allocated) Opened 19th January 2011. This leaves 60% of our portfolio in cash. Gold rallied back strongly today, recovering the majority of the losses that were incurred in yesterday's trading. We have previously stated that we saw the $1325 area as a key support for gold and we have received many questions regarding whether or not we consider this support now broken. Gold dipped below $1325 and then fell sharply to about $1309, however it has since rebounded to close for the week at around $1338. A key determinate in our opinion of whether or not a support has been broken is whether the asset has experienced two consecutive closes below the support level. Gold only managed one close below $1325, so we will consider this support valid, even if its integrity has been damaged somewhat. Of course since gold has bounced on $1310 this can also be considered a support level, however we see stronger support at about $1270 around the 200dma. Given our view that gold will reach at least $1500 this year, with a the down side of around $1270, that means as of the close there is an upside potential reward of $162 and a downside risk of $68. We know what side of the trade we would rather be on, our risk reward analysis concludes that being long gold offers the highest expected return. Given gold's oversold levels, strong support and large potential gains we are very comfortable being long gold and may look to add to our positions next week. The recent volatility in gold prices has coincided with volatility in US real interest rates, which we consider to be a key component of gold prices. (See our December article: http://www.skoptionstrading.com/updates/2010/12/5/the-key-relationship-between-us-realrates-and-gold-prices.html) Recently 10yr TIPS yields have shot to 1.27%, then fallen as low as 0.90%, before ending this week at about 1.09%. With think that QE2 will continue to keep US real rates low and lead to higher gold prices in 2011; we maintain our forecast that gold prices will rise to at least $1500 this year. However in the longer term the picture appears less clear to us. If the US undergoes a full economic recovery US real rates will rise, implying that gold prices will fall. We believe such a scenario is a fair way off so we will deal with this issue closer to the time, but we are keeping a close watch on the situation with the view to formulating our longer term outlook. A side note for any of our UK readers, gold in sterling terms looks very attractive at these levels. Although the recommendations of these service are limited to options trading on US markets, we still feel compelled to mention that we think anyone looking to purchase gold for gains in sterling terms would do very well to buy at 828. With respect to silver, our view is similar to that of gold and with similar reasoning. However we are more cautious regarding adding to our silver position, since we do not see serious support until $25 and silver is a great deal higher with respect to its moving averages than gold is. Having endured such a rapid run up in the last few months, we think some consolidation is in order. However in the longer term the disconnect between the paper futures market and physical market for silver continues to grow, creating a really strong bullish case for silver. Looking to the equity market, we missed out on benefiting from Friday's drop as we have been waiting for the stock market to become more overbought and perhaps have one last surge before placing our own bearish trades. We will sit on the sidelines for now, but continue to look for opportunities to take bearish vertical credit spreads on SPY and/or DIA.

Regards,

SK Options Trading www.skoptionstrading.com

26 January 2011
SK OptionTrader Update: Gold Eyes Key Support, Looks Oversold Current Positions: Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLV Apr 16 '11 $30 Call @ $1.31. (5% Allocated) Opened 7th January 2011. Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Short GLD Feb 19 '11 $128 Put @ $0.71/Long GLD Feb 19 '11 $127 Put @ $0.58. Net Credit $0.13. (10% allocated) Opened 19th January 2011. This leaves 60% of our portfolio in cash. Taking a brief look at the technical situation for gold, we would like to pass on the following key observations: - The $1325 area is a key support for gold. We will not add to our long positions unless we see evidence of this level being held. - The RSI is at 33.88 as of the close, this is a very low level historically. - The longer term picture is still bullish in our view and we maintain our $1500 target for gold in 2011. - We have attached a simple chart to demonstrate these points. Overall, we do not view this at a good time to be selling gold. If $1325 does not hold, then we could fall to the 200dma at around $1270. However we view this as unlikely and if such a situation did occur you can expect us to load up on GLD calls as we would see it as an extremely rare and lucrative buying opportunity. We are not ignoring the fact that our open positions are down, but with gold at such depressed and oversold technical levels we will not be cutting our losses just yet, especially since we have until June before our calls expire. Options trading involves a large amount of volatility so one must be prepared for gut wrenching swings in both directions. Whilst we are looking for gold to hold $1325 before adding to any options positions, as a side note we would like to add that buying gold ETF's or physical gold appears to be a very attractive trade at this point. Another point is that COMEX gold options expire today, so the mysterious downwards pressure that gold often often suffers around the COMEX expiration could ease.

Regards,

SK Options Trading www.skoptionstrading.com

22 January 2011
SK OptionTrader Trading Update: 3 Spread Trades Closed at Maximum Profit Current Positions: Short GLD Jan 22 '11 $128 Put @ $0.68/Long GLD Jan 22 '11 $127 Put @ $0.55. Net Credit $0.13. (10% allocated) Opened 13th December 2010. Closed 22nd January 2011. Short GLD Jan 22 '11 $128 Put @ $0.92/Long GLD Jan 22 '11 $127 Put @ $0.75. Net Credit $0.17. (10% allocated) Opened 16th December 2010. Closed 22nd January 2011. Short GLD Jan 22 '11 $127 Put @ $0.73/Long GLD Jan 22 '11 $126 Put @ $0.60. Net Credit $0.13. (10% allocated) Opened 16th December 2010. Closed 22nd January 2011. Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLV Apr 16 '11 $30 Call @ $1.31. (5% Allocated) Opened 7th January 2011. Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Short GLD Feb 19 '11 $128 Put @ $0.71/Long GLD Feb 19 '11 $127 Put @ $0.58. Net Credit $0.13. (10% allocated) Opened 19th January 2011. This leaves 60% of our portfolio in cash. As of the close of trading in the US, our three credit spread trades expired out of the money and are therefore worthless. This means that we keep the net credit we received for taking the positions, and therefore bank gains of 13%, 17% and 13% accordingly. The 30% of our portfolio allocated to these trades is now in cash, bringing our total cash allocation to 60%. However although we have not received many emails regarding the success of these trades, we have received numerous emails about the other current positions we are holding. Many subscribers have concerns over the calls we are holding since they have fallen in value, down an average of 31.18% using closing prices to mark them to market. Although this is a disappointing start to these trades, one must always put such paper losses in perspective. Following our model portfolio guidelines, 30% was invested in these call options. With an average decline of 31.18% that means one's options trading portfolio should be down about 9.35% as a result of mark to market paper losses on these trades. Whilst far from ideal, this is hardly the end of the world. Options trading involves a fair amount of volatility and so one must be prepared to grit out the downswings as well as enjoying the upswings. We still see support for gold at $1325 and although we are holding off adding to our current positions for now, we may do so at lower levels. However one must also consider that gold is perhaps going through a consolidation, so we will also be open to selling into rallies if such a situation presents itself. Our 2011 target of $1500 for gold remains intact. Our role is not one of hand holding, but for those looking for some encouragement we would suggest you have a look at the RSI for gold. The last time it was this low was back in late July when gold was about $1160. Before that we would have to go back February 2010 when gold was around $1175. Many more such examples can be found looking back through this bull market and they all tell the same story; gold is looking oversold and the downside is limited from here.

Regards,

SK Options Trading www.skoptionstrading.com

20 January 2011
SK OptionTrader Trading Signal: Place GLD Bullish Vertical Credit Spread, Feb-11, $128/$127 Current Positions: Short GLD Jan 22 '11 $128 Put @ $0.68/Long GLD Jan 22 '11 $127 Put @ $0.55. Net Credit $0.13. (10% allocated) Opened 13th December 2010. Short GLD Jan 22 '11 $128 Put @ $0.92/Long GLD Jan 22 '11 $127 Put @ $0.75. Net Credit $0.17. (10% allocated) Opened 16th December 2010. Short GLD Jan 22 '11 $127 Put @ $0.73/Long GLD Jan 22 '11 $126 Put @ $0.60. Net Credit $0.13. (10% allocated) Opened 16th December 2010. Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLV Apr 16 '11 $30 Call @ $1.31. (5% Allocated) Opened 7th January 2011. Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. Short GLD Feb 19 '11 $128 Put @ $0.71/Long GLD Feb 19 '11 $127 Put @ $0.58. Net Credit $0.13. (10% allocated) Opened 19th January 2011. This leaves 30% of our portfolio in cash. We are putting on another spread trade, similar to the ones we are currently holding that expire at the end of this week, but with a February expiration instead of January. We hereby signal to sell GLD Feb 19 '11 $128 Puts at $0.71 and buy GLD Feb 19 '11 $127 Puts at $0.58 for a net credit of $0.13, with 10% allocated to this trade. With regard to the January spreads, if you can close the trade when the spread is zero without incurring significant commissions then go ahead and do it. Otherwise we will wait until they expire at the end of this week.

Regards,

SK Options Trading www.skoptionstrading.com

17 January 2011
SK OptionTrader Update: Gold's Eurozone Sovereign Risk Premium & Expires This Week Current Positions: Short GLD Jan 22 '11 $128 Put @ $0.68/Long GLD Jan 22 '11 $127 Put @ $0.55. Net Credit $0.13. (10% allocated) Opened 13th December 2010. Short GLD Jan 22 '11 $128 Put @ $0.92/Long GLD Jan 22 '11 $127 Put @ $0.75. Net Credit $0.17. (10% allocated) Opened 16th December 2010. Short GLD Jan 22 '11 $127 Put @ $0.73/Long GLD Jan 22 '11 $126 Put @ $0.60. Net Credit $0.13. (10% allocated) Opened 16th December 2010. Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLV Apr 16 '11 $30 Call @ $1.31. (5% Allocated) Opened 7th January 2011. Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. This leaves 40% of our portfolio in cash. First let us deal with the three spread positions that we are holding, which expire this week. We intend to let them expire and should they expire worthless we get to keep the premium we collected for taking on the spread. However if the spread narrows to zero a few days prior to expiration, we may close them prematurely - both result in the same profit. This will free up a great deal of cash for us, shifting our cash allocation from 40% to 70%. The question then is what to do with this cash. Before we present our conclusion, we would like to briefly discuss the reasons why we believe gold and silver have fallen over the last couple of weeks. Traditionally, at least since the beginning of this bull market, gold and the USD have exhibited a negative correlation, with a fall in the USD causing a rise in gold prices greater than the relative decline in the USD. This relationship began to skew with de-leveraging in the global financial crisis, but in 2010 it changed yet again with the Eurozone sovereign debt troubles. As the crisis began to hit headlines in May 2010, the USD rallied as the Euro was sold off. Based on the inverse correlation between the greenback and gold one would have deduced that gold should have fallen, however it made strong gains. This is because it was being bought as a safe haven, a hedge against escalating trouble in the Eurozone countries. The selling of gold due to USD strength was overpowered by safe haven buying. Similar price action was observed recently with the trouble in Ireland and then again in Portugal. As the market changes its view on the debt troubles in Europe, so the gold price fluctuates in a manner contradictory to what one would expect from the inverse USD relationship. A good way to think of this is that gold has a premium built into its price which changes relative to the how bad the market views this EU sovereign debt risk. When the risk is perceived to be worse, gold increases in price. When it is perceived to be not so bad, gold decreases in price and loses this premium. This is what we believe has happened in the last couple of weeks, with concerns easing in Europe and therefore a decline in "Gold's Eurozone Sovereign Risk Premium", for want of a better phrase. Now that this premium has been sold out of gold, things look much more positive going forward. We still maintain our target of $1500 for 2011, however in the shorter term we are struggling to find a catalyst that will push gold prices higher. Possible drivers of a new rally could be the market rediscovering what a poor fiscal situation the US is in (note the massacre in muni-bonds recently) as well as a possible QE3 down the road. However nothing particularly jumps out at us as the obvious candidate to push gold higher and for that reason we are not going to be buying anymore calls on GLD or SLV for now. We may add to our position on further weakness if gold becomes very oversold, but for now we are more comfortable simply to watch and wait. For those looking to the longer term though, technically speaking gold is at good levels to start accumulating a long position.

Something we are in favor of however is more bullish vertical credit spread trades, as we see strong support for gold at $1330-$1320. These would be similar to the current spreads we are holding, except with February expiration and perhaps slightly lower strikes. This way we can profit even if gold goes sideways, but more details will follow later this week if we decide to go ahead with this. Looking to equities, we continue to be bemused and bewildered by the rally in the S&P500 and Dow. The only plausible explanation we can think of is that risk is on and therefore equities are getting bought. Mainstream opinion appears to believe that this is going to be a great year for stocks. We cannot concur with this, and in fact see limited upside in the stock market in 2011, unless we get a QE3 from the Fed. Given this view, we may look to take some bearish spreads on either DIA or SPY in the coming week, particularly if the S&P reaches the 1300 level which we see as a resistance point. Also note that volatility is at its lowest levels since 2007.

Regards,

SK Options Trading www.skoptionstrading.com

15 January 2011
SK OptionTrader Trading Signal: Buy More GLD $145 & $150 Calls Current Positions: Short GLD Jan 22 '11 $128 Put @ $0.68/Long GLD Jan 22 '11 $127 Put @ $0.55. Net Credit $0.13. (10% allocated) Opened 13th December 2010. Short GLD Jan 22 '11 $128 Put @ $0.92/Long GLD Jan 22 '11 $127 Put @ $0.75. Net Credit $0.17. (10% allocated) Opened 16th December 2010. Short GLD Jan 22 '11 $127 Put @ $0.73/Long GLD Jan 22 '11 $126 Put @ $0.60. Net Credit $0.13. (10% allocated) Opened 16th December 2010. Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLV Apr 16 '11 $30 Call @ $1.31. (5% Allocated) Opened 7th January 2011. Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $145 Call @ $2.70. (5% Allocated) Opened 14th January 2011. Long GLD Jun 18 '11 $150 Call @ $1.79. (5% Allocated) Opened 14th January 2011. This leaves 40% of our portfolio in cash.

Further to our previous updates we are following through with our plan to buy this dip in gold. We therefore signal the following trades: Buy GLD Jun 18 '11 $145 Call at $2.70 with 5% allocated to this trade. Buy GLD Jun 18 '11 $150 Call at $1.79 with 5% allocated to this trade. Despite the sell of in gold and silver we are still comfortable with our positions and our reasoning for placing these trades remains intact. If you have any questions, just let us know. Regards,

SK Options Trading www.skoptionstrading.com

12 January 2011
SK OptionTrader Update: Review Of Current Positions Current Positions: Short GLD Jan 22 '11 $128 Put @ $0.68/Long GLD Jan 22 '11 $127 Put @ $0.55. Net Credit $0.13. (10% allocated) Opened 13th December 2010. Short GLD Jan 22 '11 $128 Put @ $0.92/Long GLD Jan 22 '11 $127 Put @ $0.75. Net Credit $0.17. (10% allocated) Opened 16th December 2010. Short GLD Jan 22 '11 $127 Put @ $0.73/Long GLD Jan 22 '11 $126 Put @ $0.60. Net Credit $0.13. (10% allocated) Opened 16th December 2010. Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLV Apr 16 '11 $30 Call @ $1.31. (5% Allocated) Opened 7th January 2011. Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. This leaves 50% of our portfolio in cash. We having been receiving a number of questions from subscribers on when we intend to close out our current bullish vertical credit spreads on GLD. So just to clear things up, here are our plans for our current open trades. Unless the spreads that we sold at $0.13, $0.17 and $0.13 narrow to 1 or 2 cents, we intend to hold these positions until expiration. Upon expiration the spread will be zero and we will pocket profits of 13%, 17% and 13% on these trades, provided GLD is at $128 or above on expiration. We are happy with the call options we are holding at present. Our GLD calls are up a tad and our SLV and SLW calls are up over 20%, a gain we are very happy with since we have only had the positions for five days. We intend to increase our position in these call options, preferably on weakness, over the next week or so. Since these calls are quiet long dated, we are comfortable with having to endure the negative Theta effect on our position since it is not too significant at present, furthermore it is unlikely that we would hold these calls for much more than a month. Thats all for now, if you have any questions just let us know. Regards,

SK Options Trading www.skoptionstrading.com

8 January 2011
SK OptionTrader Trading Signal: Buy GLD, SLV and SLW Calls Current Positions: Short GLD Jan 22 '11 $128 Put @ $0.68/Long GLD Jan 22 '11 $127 Put @ $0.55. Net Credit $0.13. (10% allocated) Opened 13th December 2010. Short GLD Jan 22 '11 $128 Put @ $0.92/Long GLD Jan 22 '11 $127 Put @ $0.75. Net Credit $0.17. (10% allocated) Opened 16th December 2010. Short GLD Jan 22 '11 $127 Put @ $0.73/Long GLD Jan 22 '11 $126 Put @ $0.60. Net Credit $0.13. (10% allocated) Opened 16th December 2010. Long GLD Jun 18 '11 $145 Call @ $3.25. (5% Allocated) Opened 7th January 2011. Long GLD Jun 18 '11 $150 Call @ $2.28. (5% Allocated) Opened 7th January 2011. Long SLV Apr 16 '11 $30 Call @ $1.31. (5% Allocated) Opened 7th January 2011. Long SLW Jun 18 '11 $40 Call @ $2.57. (5% Allocated) Opened 7th January 2011. This leaves 50% of our portfolio in cash.

Further to our previous update and having seen gold hold up on its support around $1350 we are following through with our plan to buy this dip. We therefore signal the following trades and we may look to add to this long position next week: Buy GLD Jun 18 '11 $145 Call at $3.25 with 5% allocated to this trade. Long GLD Jun 18 '11 $150 Call @ $2.28 with 5% allocated to this trade. Long SLV Apr 16 '11 $30 Call @ $1.31 with 5% allocated to this trade. Long SLW Jun 18 '11 $40 Call @ $2.57 with 5% allocated to this trade. Next week we may also look at closing out our vertical credit spread trades, which are showing a paper profit, and use the proceeds to buy more out of the money call options on gold and silver. If you have any questions, just let us know. Regards,

SK Options Trading www.skoptionstrading.com

6 January 2011
SK OptionTrader Update: Gold & Silver Drip Presents Buying Opportunity Current Positions: Short GLD Jan 22 '11 $128 Put @ $0.68/Long GLD Jan 22 '11 $127 Put @ $0.55. Net Credit $0.13. (10% allocated) Opened 13th December 2010. Short GLD Jan 22 '11 $128 Put @ $0.92/Long GLD Jan 22 '11 $127 Put @ $0.75. Net Credit $0.17. (10% allocated) Opened 16th December 2010. Short GLD Jan 22 '11 $127 Put @ $0.73/Long GLD Jan 22 '11 $126 Put @ $0.60. Net Credit $0.13. (10% allocated) Opened 16th December 2010 This leaves 70% of our portfolio in cash. The recent bout of selling in precious metals has not deterred our bullish stance and we view it has a good buying opportunity. We intend to let the next trading session pass us by, just to see if there is any more of this shake out still to come. Then we intend to begin buying out of the money GLD and SLV calls later this week. Gold and silver are not overbought and gold is well supported, with silver enjoying some support but to a lesser extent than gold. For GLD we are going to target strikes above $145 in April and June calls, and strikes of at least $30 for SLV. We are going to sit and hold our open spread trades for now, as we anticipate they will tighten further. We may even look to hold them right up until expiration, but we will cover this in more detail closer the time.

Regards,

SK Options Trading www.skoptionstrading.com

4 January 2011
SK OptionTrader Update: Our Trading Strategy Going Into 2011 Current Positions: Short GLD Jan 22 '11 $128 Put @ $0.68/Long GLD Jan 22 '11 $127 Put @ $0.55. Net Credit $0.13. (10% allocated) Opened 13th December 2010. Short GLD Jan 22 '11 $128 Put @ $0.92/Long GLD Jan 22 '11 $127 Put @ $0.75. Net Credit $0.17. (10% allocated) Opened 16th December 2010. Short GLD Jan 22 '11 $127 Put @ $0.73/Long GLD Jan 22 '11 $126 Put @ $0.60. Net Credit $0.13. (10% allocated) Opened 16th December 2010 This leaves 70% of our portfolio in cash. We would like to take this opportunity to wish all our subscribers a happy new year and put forward our trading strategy going into 2011. This is not a plan that is comprehensive of the entire year, moreover simply our trading plans for the first month or so. Firstly we must address our current positions, three bullish vertical credit spreads on GLD. We took these positions as we thought movement in gold would be limited over the holiday period, therefore wanted to benefit from some sideways movement so placed the trades listed above. This has pretty much panned out as we thought, with gold moving sideways and our positions gaining in value. In these trades we benefit from the spread between the two puts narrowing, and this is what has been happening over the last few weeks. The spreads have narrowed from $0.13 to $0.03, $0.17 to $0.03 and from $0.13 to $0.04 on each of our trades. That means if we were to close them at these prices we would bank ourselves profits of 10%, 14% and 9% on each of the trades. Since the majority of the profits can be collected now we will probably close out these trades over the next couple of trading sessions, rather than waiting until for them to expire on the 22nd January 2011. Looking forward, we think gold and silver have great fundamentals going into 2011. This major rally that began in August probably has one more leg up to go before we get a serious correction in precious metals. We see gold at $1500+ this year, quite possible within the first quarter sparked by a breakout above $1430. Therefore we intend to position ourselves accordingly to benefit from this move. We are going to target out of the money call options on GLD, with strikes above $145 in April and June contracts. We see silver prices enjoying a similar rise and therefore we will be taking similar positions on SLV. Whilst we largely avoid precious metal stocks, SLW would be one of the only companies we would consider trading due to its unique business model. Therefore we may purchase some call options on SLW to complement and add leverage to our silver position. However overall we are more comfortable with taking gold positions, since we believe the metal has better technical support therefore when we do undergo a correction, silver could be hit a great deal harder than gold. We do not see a positive year for the global or US economy, and the same goes for equity markets, unless we get another dose of quantitative easing which could fuel another rally in stocks. Once we have established our positions in gold and silver, we may look to take some bearish vertical credit spread positions on SPY. Simply put we do not see what will drive the stock market higher in the short term, except a possible QE3 by Bernanke. Overall though we are looking forward to a prosperous 2011 in terms of our own trading and wish the same to all our subscribers. Regards,

SK Options Trading www.skoptionstrading.com

17 December 2010
SK OptionTrader Trading Signal: More Bullish Vertical Credit Spreads on GLD

Current Positions: Short GLD Jan 22 '11 $128 Put @ $0.68/Long GLD Jan 22 '11 $127 Put @ $0.55. Net Credit $0.13. (10% allocated) Opened 13th December 2010. Short GLD Jan 22 '11 $128 Put @ $0.92/Long GLD Jan 22 '11 $127 Put @ $0.75. Net Credit $0.17. (10% allocated) Opened 16th December 2010. Short GLD Jan 22 '11 $127 Put @ $0.73/Long GLD Jan 22 '11 $126 Put @ $0.60. Net Credit $0.13. (10% allocated) Opened 16th December 2010 This leaves 70% of our portfolio in cash.

Since gold prices have weakened slightly, we have decided to add to our current vertical spread position with the two following trades: We hereby signal to Sell GLD Jan 22 '11 $128 Puts for $0.92 and Buy GLD Jan 22 '11 $127 Puts at $0.75. This results in a net credit of $0.17. We are allocating 10% of our model portfolio to this trade. We also hereby signal to Sell GLD Jan 22 '11 $127 Puts for $0.73 and Buy GLD Jan 22 '11 $126 Puts at $0.60. This results in a net credit of $0.13. We are allocating 10% of our model portfolio to this trade as well. Regards,

SK Options Trading www.skoptionstrading.com

14 December 2010
SK OptionTrader Trading Signal: Sell GLD $128 Jan-11 Puts, Buy GLD Jan-11 $127 Puts

Current Positions: Short GLD Jan 22 '11 $128 Put @ $0.68/Long GLD Jan 22 '11 $127 Put @ $0.55. Net Credit $0.13. (10% allocated) Opened 13th December 2010. This leaves 90% of our portfolio in cash.

Further to our recent update we are taking a bullish credit vertical spread position on GLD: We hereby by signal to Sell GLD Jan 22 '11 $128 Puts for $0.68 and Buy GLD Jan 22 '11 $127 Puts at $0.55. This results in a net credit of $0.13. We are allocating 10% of our model portfolio to this trade.

Regards,

SK Options Trading www.skoptionstrading.com

12 December 2010
SK OptionTrader Update: Gold's Future Still Shines

Current Positions: We currently have no open positions. This leaves 100% of our portfolio in cash.

After banking another good round of profits in gold, the question now is how to best deploy our cash from here. Here is a rough plan of how we see things and what our trading strategy is for the next few weeks. We are still very bullish on gold and consequently we think it is more likely that we will see gold at $1500 before we see it at $1300. Rising US Treasury Yields and mortgage rates only increase the incentive for the Federal Reserve to embark on more quantitative easing in the future to lower these rates. With the a Fed statement due this week, we could see a mention of this which would be bullish for gold. However we are wary that we are entering the holiday season soon and trading will likely be thin, with big players not returning to the market until January. A large component of options trading is not only getting the direction of the underlying correct, but also the correctly timing when the move will happen. This is due to the decay of the time premium (Theta) that one is exposed to when purchasing an option. Therefore we have decided against buying more call options on GLD this week, despite our bullishness, as we are not sure that a significant enough move will come over the holiday season, large enough to compensate us for being exposed to this time premium decay. We are however in favor of taking out some bullish credit spread positions, where we would be short Theta, and holding them for a month of so. This allows us to benefit from an upwards or sideways move in gold over the coming weeks, with our position hopefully gaining value each day as the time premium decays, since we are of course short Theta. We are looking at taking these bullish credit spread positions in GLD January-2011 puts with strikes in the $129-$126 range, and perhaps in SLV with strikes below $25. We aim to pick up these positions on market weakness if possible. If we are still very bullish after the holidays then we will be looking to pick up some OTM calls on GLD and SLV. Post holiday season we are also considering some bearish credit spreads on equities, but more will follow on these closer to the time.

Regards,

SK Options Trading www.skoptionstrading.com

8 December 2010
SK OptionTrader Trading Signal: Stops Triggered on GLD Mar-11 $140 & $145 Calls

Current Positions: Long GLD Mar 19 '11 $140 Calls @ $4.50 (5% allocated) Opened on 15th November 2010. STOP @ $4.95. SOLD @ $4.95. 10.00% Gain. Long GLD Mar 19 '11 $145 Calls @ $3.05 (5% allocated) Opened on 15th November 2010. STOP @ $3.40. SOLD @ $3.40. 11.48% Gain. Long GLD Mar 19 '11 $140 Calls @ $3.65 (5% allocated) Opened on 16th November 2010. STOP @ $4.95. SOLD @ $4.95. 35.62% Gain. Long GLD Mar 19 '11 $145 Calls @ $2.55 (5% allocated) Opened on 16th November 2010. STOP @ $3.40. SOLD @ $3.40. 33.33% Gain. Long GLD Mar 19 '11 $145 Calls @ $2.43 (5% allocated) Opened on 16th November 2010. STOP @ $3.40. SOLD @ $3.40. 39.92% Gain. Long GLD Mar 19 '11 $140 Calls @ $3.05 (5% allocated) Opened on 17th November 2010. STOP @ $4.95. SOLD @ $4.95. 62.30% Gain. This leaves 100% of our portfolio in cash. All the above stops have just been triggered. We have banked some decent profits here, however now the question is what to do next and how to best deploy our cash, which currently sits at 100%. We will consider this and outline a plan soon, but for now we are just going to watch and wait. Regards,

SK Options Trading www.skoptionstrading.com

7 December 2010
SK OptionTrader Update: New All Time High For Gold, New Stops Current Positions: Long GLD Mar 19 '11 $140 Calls @ $4.50 (5% allocated) Opened on 15th November 2010. STOP @ $4.95 Long GLD Mar 19 '11 $145 Calls @ $3.05 (5% allocated) Opened on 15th November 2010. STOP @ $3.40 Long GLD Mar 19 '11 $140 Calls @ $3.65 (5% allocated) Opened on 16th November 2010. STOP @ $4.95 Long GLD Mar 19 '11 $145 Calls @ $2.55 (5% allocated) Opened on 16th November 2010. STOP @ $3.40 Long GLD Mar 19 '11 $145 Calls @ $2.43 (5% allocated) Opened on 16th November 2010. STOP @ $3.40 Long GLD Mar 19 '11 $140 Calls @ $3.05 (5% allocated) Opened on 17th November 2010. STOP @ $4.95 This leaves 70% of our portfolio in cash. This is just a brief update to say that it was good to see gold touching a new all time high in the last trading session, and a close above $1425 will set in motion a much larger move towards $1500. Keeping in mind we are now sitting on some pretty decent paper profits in our open trades, we are inserting the stops detailed above in an attempt to lock some of these gains in.

Regards,

SK Options Trading www.skoptionstrading.com

3 December 2010
SK OptionTrader Update: EU Debt Troubles Ease, Gold Holds Firm Current Positions: Long GLD Mar 19 '11 $140 Calls @ $4.50 (5% allocated) Opened on 15th November 2010 Long GLD Mar 19 '11 $145 Calls @ $3.05 (5% allocated) Opened on 15th November 2010 Long GLD Mar 19 '11 $140 Calls @ $3.65 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $145 Calls @ $2.55 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $145 Calls @ $2.43 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $140 Calls @ $3.05 (5% allocated) Opened on 17th November 2010 This leaves 70% of our portfolio in cash. Comments out of the ECB appear to have calmed European sovereign debt worries, with credit default swaps falling for all the debt ridden PIIGS. So it seems risk is back on, with bond yields falling in the EU and equities rising. Although Trichet has not revealed the size of the ECB's bond buying program, they are undoubtedly buying bonds heavily in our opinion and will continue to do so as and when they view it as necessary. This leaves us with concerns that the European banks may become addicted to this constant availability of short term funding from the ECB, and will struggle if/when it gets pulled or even reduced. Interestingly gold did not fall despite the reduced concern over Europe. It appears gold is being bought when risk is on and when risk is off. It is doing well when the dollar rallies and when the dollar falls. Quite frankly, given the way gold is currently behaving, we cannot think of a better asset to be in right now. Therefore we are holding our long position in GLD calls and will look to lock in some profits with stops if the gold price appreciates further. As for silver, the fact that it has had such a dramatically sharp rally is causing us some concern, and we are hesitant about going long on silver at present. Whilst we still think silver is more likely to go higher from here than it is to go lower, the risk reward dynamics do not appear that attractive to us. Even if one presumes that a further rally takes silver up another couple of dollars, a major correction in silver could see it lose $4.00 and not even be below the 50dma. It could lose $7.00 and not even touch the 200dma. As anyone who has traded silver will know, when silver corrects it moves hard and fast, and basically we do not want to be caught on the wrong side of any such move. However the beauty with options is that you do not always have to know which way the underlying will move in order to make a profitable trade. We are considering a silver trade that would be non directional, and simply long volatility, meaning that we would profit form a swing up or down, but more details will follow on this closer to the time. However both gold and silver continue to look very positive over the medium term, backed up by strong physical demand. One only has to look at the record sales of silver eagle coins this year and see that Chinese gold imports are up 500% on 2009 to know this.

Regards,

SK Options Trading www.skoptionstrading.com

1 December 2010
SK OptionTrader Update: Gold Surges Despite Dollar Strength Current Positions: Long GLD Mar 19 '11 $140 Calls @ $4.50 (5% allocated) Opened on 15th November 2010 Long GLD Mar 19 '11 $145 Calls @ $3.05 (5% allocated) Opened on 15th November 2010 Long GLD Mar 19 '11 $140 Calls @ $3.65 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $145 Calls @ $2.55 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $145 Calls @ $2.43 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $140 Calls @ $3.05 (5% allocated) Opened on 17th November 2010 This leaves 70% of our portfolio in cash. Just a quick note on today's action: Gold is surging despite no significant decline in the US dollar. This is further confirmation of the solid bullish fundamentals behind gold and how it can double as both a hedge against US dollar devaluation and geopolitical instability in Europe. We are currently seeing gold trade at $1388. If it can hold this level or above then the technical picture improves a great deal, and concerns we noted earlier this week will be put to rest. Silver is also soaring, looking to smashing through its resistance around $28.00. Whilst we do not have any open positions on silver at present this is still good to see since it confirms gold's price action and we watch with interest. Our open positions are now all in profit, between 8% and 60%, and we will look to insert stops should they continue to rise but at present we are holding things as they are. Regards,

SK Options Trading www.skoptionstrading.com

28 November 2010
SK OptionTrader Update: USD Approaching Overbought Range Current Positions: Long GLD Mar 19 '11 $140 Calls @ $4.50 (5% allocated) Opened on 15th November 2010 Long GLD Mar 19 '11 $145 Calls @ $3.05 (5% allocated) Opened on 15th November 2010 Long GLD Mar 19 '11 $140 Calls @ $3.65 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $145 Calls @ $2.55 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $145 Calls @ $2.43 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $140 Calls @ $3.05 (5% allocated) Opened on 17th November 2010 This leaves 70% of our portfolio in cash. In response to reader requests to include some charts with our updates, the attached charts should be read along with this update to enhance your understanding of what we are trying to say. Sovereign debt issues continued to plague Europe this week and there are fears that further bailouts in addition to the Irish one may be needed. Portuguese five-year credit default swaps were up 20 basis points on Friday, standing at 500 bps and Spanish CDS widened 9 bps to 312 bps. For those unfamiliar with credit default swaps, 312bps means that it costs 312,000 euros to insure 10 million euros of debt exposure against default. We view this as the most important measure of the market's current perception of risk with respect to the sovereign debt issues, hence why we are keeping a close eye on the movements in these markets. These debt issues sparked selling in the Euro driving it more towards an oversold zone, and subsequent buying of the USD has cause a rally in the greenback that has moved the USD index towards the overbought zone. This has had a dampening effect on gold prices, however we must draw attention to the fact that gold prices have not fallen significantly with the rally in the USD, which we view as a sign of strength behind gold. Whilst USD strength has been pulling gold down, the European troubles have caused a fair amount of safe haven buying, helping to keep gold prices high. There are a couple of negative technical points we have to make regarding the precious metals. Firstly gold may be forming a bearish head and shoulders pattern. Whilst we would still need to see gold retreat back to $1325 and then below that level to complete the formation, it is still something worth noting and we will monitor the situation closely. Secondly silver has encountered strong resistance at $28.00 and one could view its two failed attempts to break that level as a double top. We must also point out that the 200 day moving average for silver stands at $19.61, a full $7.08 or 25% below Friday's close. With this in mind, we will not be taking any further bullish positions on silver at this time, but will re-evaluate if the technical picture becomes more appealing. In conclusion, we expect this week to be one of watching and waiting more so than trading. We will hold our current positions and be on the look out for new opportunities. We are comfortable with our current long positions in GLD calls since gold is not overbought and the USD is looking increasingly overbought. If there were to be another large drop in the Euro and subsequent strength in the greenback due to an escalation of the sovereign debt issues in Europe, then we think that gold will hold up despite any USD rally due to its value as safe haven asset.

Regards,

SK Options Trading www.skoptionstrading.com

25 November 2010
SK OptionTrader Trading Signal: Stop Triggered on SLV Apr 16 '11 $28 Calls Current Positions: Long GLD Mar 19 '11 $140 Calls @ $4.50 (5% allocated) Opened on 15th November 2010 Long GLD Mar 19 '11 $145 Calls @ $3.05 (5% allocated) Opened on 15th November 2010 Long GLD Mar 19 '11 $140 Calls @ $3.65 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $145 Calls @ $2.55 (5% allocated) Opened on 16th November 2010 Long SLV Apr 16 '11 $28 Calls @ $1.41 (5% allocated) Opened on 16th November 2010, STOP TRIGGERED @ $2.00, SOLD @ $2.00 Long GLD Mar 19 '11 $145 Calls @ $2.43 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $140 Calls @ $3.05 (5% allocated) Opened on 17th November 2010 This leaves 70% of our portfolio in cash.

Our stop has been triggered on our SLV Apr 16 '11 $28 Calls at $2.00, so we have sold the position for $2.00. This gives us a 41.84% profit on the trade, having held it for 9 days.

Regards,

SK Options Trading www.skoptionstrading.com

24 November 2010
SK OptionTrader Update: EU Bailout Fails To Calm Contagion Fears Current Positions: Long GLD Mar 19 '11 $140 Calls @ $4.50 (5% allocated) Opened on 15th November 2010 Long GLD Mar 19 '11 $145 Calls @ $3.05 (5% allocated) Opened on 15th November 2010 Long GLD Mar 19 '11 $140 Calls @ $3.65 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $145 Calls @ $2.55 (5% allocated) Opened on 16th November 2010 Long SLV Apr 16 '11 $28 Calls @ $1.41 (5% allocated) Opened on 16th November 2010, STOP @ $2.00 Long GLD Mar 19 '11 $145 Calls @ $2.43 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $140 Calls @ $3.05 (5% allocated) Opened on 17th November 2010 This leaves 65% of our portfolio in cash. Despite many hoping that the Irish bailout announcement by the EU over the weekend would calm fears of a contagious sovereign debt crisis amongst the PIIGS of the Euro zone, it appears the fears are still very much present, if not growing. Since the bailout news broke over the weekend; the Euro has been sold off heavily, Spanish bond yields have hit an all time high and Portugal CDS (Credit Default Swaps - the cost of insuring debt against default) widened by 40bps when markets opened this week. This shows that EU has yet to convince markets that it has the solution for these problems. Looking beyond the band aid solutions, we see two serious issues on the horizon for the Euro zone: Firstly headlines such as "EU bails out Greece", "EU plans to bailout Ireland", and "EU guarantees debt of [insert the next Euro zone country to need help here]" do not in our opinion do much to reduce the debt burden and associated worries that are plaguing European bond markets at present. The reason being that the EU is collection of countries, so how can a collection of countries bail out countries within this collection, in effect bailing out themselves? The reasoning behind is that the stronger Euro countries such as Germany will take on most of this burden, helping out the weaker countries. But can Germany really be expected to continue to foot the bill for poor fiscal management in countries such as Ireland, Greece, Portugal, Spain and Italy? Whether they do or not remains to be seen, but we believe this situation does increase the incentive for the ECB to follow the Fed with their own quantitative easing measures and monetise the debt of some Euro countries. Secondly there is a danger of a political and public backlash against austerity measures that are needed in the Euro zone and are currently mandatory in order to receive EU aid. The danger is that the public and therefore some politicians wrongly target the banks and corporations for causing the economic crisis, and go to extreme lengths to protect the average voter on the street from suffering any form of economic hardship, since some believe that the average citizen with four credit cards, three mortgages and two buy-to-let holiday homes is not to blame at all for the current situation. Therefore instead of cutting government spending by doing things such as reducing unemployment benefits, they could look to tax businesses more to try and pay off their budget deficits, a practice which we believe will be counter productive. This could particularly be a problem in Ireland if they decided to raise the current corporate tax rate of 12.5%, a relatively low rate which has cause many multinationals operate out of Ireland. If they raise this tax, big business will simply move to the next tax haven, and the budget deficit will worsen even more. The reason we are watching this so closely is that if the Euro falls, the US dollar rises, which tends to lead to a decrease in the price of gold. What concerns us the most at present is that gold is rising, despite a strengthening USD. We can therefore imply that the there is a lot of safe haven buying in gold, meaning that investors are buying it not only as a hedge against USD devaluation, but also against ongoing political and economic instability both in the US and Europe. This is an important indicator that things are not as bright and rosy as many believe them to be. For now however we are holding our positions, since the factors mentioned above lead us to believe gold prices are still heading higher.

Regards,

SK Options Trading www.skoptionstrading.com

23 November 2010
SK OptionTrader Update: Stop on SLV Calls, plus some small changes to our service Current Positions: Long GLD Mar 19 '11 $140 Calls @ $4.50 (5% allocated) Opened on 15th November 2010 Long GLD Mar 19 '11 $145 Calls @ $3.05 (5% allocated) Opened on 15th November 2010 Long GLD Mar 19 '11 $140 Calls @ $3.65 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $145 Calls @ $2.55 (5% allocated) Opened on 16th November 2010 Long SLV Apr 16 '11 $28 Calls @ $1.41 (5% allocated) Opened on 16th November 2010, STOP @ $2.00 Long GLD Mar 19 '11 $145 Calls @ $2.43 (5% allocated) Opened on 16th November 2010 Long GLD Mar 19 '11 $140 Calls @ $3.05 (5% allocated) Opened on 17th November 2010 This leaves 65% of our portfolio in cash. As shown above, we have added a stop order on our SLV Apr 16 '11 $28 Calls at $2.00 to secure some gains on this trade, given that it is showing paper profit of around 80%. One may also notice two small changes to the presentation of our service. Firstly we have included the date that positions were opened in our portfolio summary, and secondly we have replaced the units allocation system with simple percentage allocations that we think will be easier to understand. If you have any questions on the above, just let us know. Regards,

SK Options Trading www.skoptionstrading.com

22 November 2010
SK OptionTrader Update: Irish Bailout & The Euro-USD-Gold Relationship Current Positions: Long GLD Mar 19 '11 $140 Calls @ $4.50 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $3.05 (5 Units allocated) Long GLD Mar 19 '11 $140 Calls @ $3.65 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $2.55 (5 Units allocated) Long SLV Apr 16 '11 $28 Calls @ $1.41 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $2.43 (5 Units allocated) Long GLD Mar 19 '11 $140 Calls @ $3.05 (5 Units allocated) This leaves 65 units, or 65% of our portfolio in cash. Over the weekend, Ireland reluctantly agreed to a bailout in the form of around 100 billion in EU aid. The EU is going to guarantee Irish debt, which will help stem the soaring Irish-Bund spread, and they will most probably extend this guarantee to Spain and Portugal. Their primary aim here is to prevent speculation of the magnitude that we saw during the Greek crisis in May of this year, and prevent the contagion of other EU member states. The EU guaranteeing Irish debt is a step closer to fiscal union as well as monetary union between the Euro countries, which would be an historical political development, but political commentary is not the purpose of this service. Our concern is what repercussions this bailout has on our open positions, and we see it playing out as follows: The fact that the EU has acted far more quickly that they did in May, effectively offering Ireland a bailout before the country had even asked for one, shows that they are committed to ensuring that Euro countries are not threatened by sovereign debt crisis, and that the Euro maintains credibility as a major currency. This relieves some of the downwards pressure on the Euro, which is a cue for the US dollar to resume its down trend, and therefore gold to resume its uptrend. Therefore we intend to hold our gold long positions for now, but will most likely not be increasing our position in the near term. With respect to silver, we would like to have a larger position in SLV calls, and perhaps SLW calls too, but the fact that every time we look at the chart silver still appears more overbought/less oversold than gold. Having traded both metals for many years we are well aware of silver's ability to snap back to the downside, as well as enjoy substantial spikes upwards, so we will not be purchasing any more long silver positions at present. If silver does indeed rocket skywards, then we are content with enjoying modest profits from our single trade on SLV calls, since we are not comfortable taking large new long positions at current levels. A further note on our current positions, we will look to insert stops to lock in profits if or when our GLD positions begin to show significant gains, and intend to place a stop on our lone silver trade this week, since it is showing a paper profit of around 50% already. In terms of new trades, we are looking at taking out some bullish credit spread trades on GLD, but more details on this will follow later this week should we decide to pursue this course of action. After successfully closing our bearish S&P and Dow trades last week, we have had numerous inquiries as to our opinion on the US equity markets. At this point in time we do not have a strong enough opinion to warrant placing any trades on equities. We are bearish on US equities, but not to the extend nor with enough conviction to justify placing a trade at present. For your interest, our latest article entitled "A critical analysis of current Federal Reserve Actions and Their Consequences" can be found here: http://www.skoptionstrading.com/updates/2010/11/21/acritical-analysis-of-current-federal-reserve-actions-and-t.html

Regards,

SK Options Trading www.skoptionstrading.com

19 November 2010
SK OptionTrader Trading Signal: Close Out SPY & DIA Credit Spreads Current Positions: Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) CLOSED Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call @ $0.31 (10 Units allocated) CLOSED Long GLD Mar 19 '11 $140 Calls @ $4.50 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $3.05 (5 Units allocated) Long GLD Mar 19 '11 $140 Calls @ $3.65 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $2.55 (5 Units allocated) Long SLV Apr 16 '11 $28 Calls @ $1.41 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $2.43 (5 Units allocated) Long GLD Mar 19 '11 $140 Calls @ $3.05 (5 Units allocated) This leaves 65 units, or 65% of our portfolio in cash Since we can bank the majority of our profits on our SPY & DIA bearish credit spread trades, we are going to do so now, rather than wait another month until expiration. We have closed them out at the following prices: Having bought SPY Dec 18 '10 $130 Calls for $0.31, we have sold them for $0.05, a $0.26 loss. Having bold SPY Dec 18 '10 $129 Call for $0.43, we have bought them back for $0.05, a $0.38 gain. This gives us an overall profit of $0.12 or 12% on this trade in 15 days. Having bought DIA Dec 18 '10 $121 Calls for $0.20, we have sold them for $0.01, a $0.19 loss. Having sold DIA Dec 18 '10 $120 Calls for $0.31, we have bought them back for $0.04, a $0.27 gain. This gives us an overall profit of $0.08 or 8% on this trade in 15 days.

Regards, SK Options Trading www.skoptionstrading.com

18 November 2010
SK OptionTrader Trading Signal: Buy More Mar-11 $140 GLD Calls Current Positions: Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated) Long GLD Mar 19 '11 $140 Calls @ $4.50 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $3.05 (5 Units allocated) Long GLD Mar 19 '11 $140 Calls @ $3.65 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $2.55 (5 Units allocated) Long SLV Apr 16 '11 $28 Calls @ $1.41 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $2.43 (5 Units allocated) Long GLD Mar 19 '11 $140 Calls @ $3.05 (5 Units allocated) This leaves 45 units, or 45% of our portfolio in cash Gold appears to holding on its $1330 support. Therefore we are adding to our positions yet again and signal the following trade: Buy GLD Mar 19 '11 $140 Calls at $3.05 with 5 Units allocated to this trade. We will also be looking to close our our credit spread trades tomorrow, since we can bank the majority of possible profits now without waiting for expiration. Regards,

SK Options Trading www.skoptionstrading.com

17 November 2010
SK OptionTrader Trading Signal: Buy More GLD Mar-11 $145 Calls Current Positions: Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated) Long GLD Mar 19 '11 $140 Calls @ $4.50 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $3.05 (5 Units allocated) Long GLD Mar 19 '11 $140 Calls @ $3.65 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $2.55 (5 Units allocated)

Long SLV Apr 16 '11 $28 Calls @ $1.41 (5 Units allocated)


Long GLD Mar 19 '11 $145 Calls @ $2.43 (5 Units allocated) This leaves 50 units, or 50% of our portfolio in cash Gold appears to have bounced on our previously mentioned support level of $1330. Therefore we are adding to our positions yet again and signal the following trade: Buy GLD Mar 19 '11 $145 Calls at $2.43 with 5 Units allocated to this trade.

Regards,

SK Options Trading www.skoptionstrading.com

17 November 2010

SK OptionTrader Trading Signal: Buy GLD & SLV Call Options

Current Positions: Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated) Long GLD Mar 19 '11 $140 Calls @ $4.50 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $3.05 (5 Units allocated) Long GLD Mar 19 '11 $140 Calls @ $3.65 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $2.55 (5 Units allocated)

Long SLV Apr 16 '11 $28 Calls @ $1.41 (5 Units allocated)


This leaves 55 units, or 55% of our portfolio in cash We are going to buy this weakness in gold and silver and therefore signal the following trades, as part of our previously discussed strategy to build a long position on the two metals. Buy GLD Mar 19 '11 $140 Calls at $3.65 with 5 Units allocated to this trade. Buy GLD Mar 19 '11 $145 Calls at $2.55 with 5 Units allocated to this trade. Buy SLV Apr 16 '11 $28 Calls at $1.41 with 5 Units allocated to this trade. Regards,

SK Options Trading www.skoptionstrading.com

16 November 2010
SK OptionTrader Trading Signal: Buy GLD Mar 19 '11 $140 & $145 Calls Current Positions: Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated) Long GLD Mar 19 '11 $140 Calls @ $4.50 (5 Units allocated) Long GLD Mar 19 '11 $145 Calls @ $3.05 (5 Units allocated) This leaves 70 units, or 70% of our portfolio in cash. As discussed in our previous update: We hereby signal to buy GLD Mar 19 '11 $140 Calls at $4.50 with 5 Units allocated to this trade. We also hereby signal to buy GLD Mar 19 '11 $145 Calls at $3.05 with 5 Units allocated to this trade. Regards,

SK Options Trading www.skoptionstrading.com

15 November 2010
SK OptionTrader Update: Time To Begin Layering Back Into Gold Current Positions: Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated) This leaves 80 units, or 80% of our portfolio in cash. Our stops on previous trades successfully ensured that we avoided the majority of the recent pullback in gold and silver. However now we think that it's time to being building another long position in gold and we intend to start buying over the course of this week, beginning when markets open in the US, and stepping up our buying if prices weaken. We are going to target out of the money March 2011 GLD calls to begin with and we would also like to take a position on silver but we will just watch for now since it is relatively overbought compared with gold. Something that is of great concern to us is the present situation in Europe, with the PIIGS looking in bad shape yet again. We have previously mentioned our concern over the rising Irish-Bund spread, the difference between the yield on Irish and German government bonds. When we first noted this concern to subscribers about 12 days ago, the spread was over 500 bps. We found this alarming and therefore took bearish credit spread positions on equities on 4th November 2010, believing that any upside for equities from QE2 would be strongly counteracted by more bad news out of the EU. The S&P has indeed declined since then but we have seen far more selling in Irish bonds, driving the Irish-Bund spread to over 720 bps. One must also note the CDS (Credit Default Swaps) on PIIGS debt are now wider than they were during the crisis in May 2010, and CDS of Anglo Irish Bank is shooting off the charts. These are very dangerous signs, and with Irish-based lenders borrowing 130 billion from the ECB as of Oct. 29, up almost 10 billion from 121.1 billion at the end of September, we are concerned that the crisis that gripped Greece in May will come to Ireland shortly. If one adjusts the Irish borrowing for size, it is equivalent to US banks borrowing many trillions from the Fed. This could be a cause for concern since we could see a decline in the Euro with these troubles, and therefore a strengthening of the US Dollar which would be associated with a decline in gold prices. However one must remember that not only is gold a hedge against inflation and US dollar devaluation, but it is also a safe haven in times of instability and fear. This is why it rallied during the Greek crisis in May and why we are comfortable taking further long positions in gold now despite the troubles in Ireland. Plus, if we get a bailout of Ireland by the EU, then the Euro could strengthen and that means the US dollar will go down and gold prices will tick higher.

Regards,

SK Options Trading www.skoptionstrading.com

13 November 2010
SK OptionTrader Trading Signal: Stop Triggered on Mar-11 $140 GLD Calls Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Stop @ $5.00, Sold @ $5.00 Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Stop @ $5.00, Sold @ $5.00 Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated) This leaves 80 units, or 80% of our portfolio in cash.

Our stop at $5.00 has been triggered on our March 2011 $140 GLD Calls, so we have sold both positions at $5.00. This gives us a profit of 40.85% in 21 days on the purchase we made at $3.55 and a profit of 61.29% in 15 days on the purchase we made for $3.10. An update will follow over the weekend. Regards,

SK Options Trading www.skoptionstrading.com

10 November 2010
SK OptionTrader Update: Just Watch For Now Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Stop @ $5.00 Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Stop @ $5.00 Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated) This leaves 70 units, or 70% of our portfolio in cash. Having sold the vast majority of our gold and silver related positions yesterday, we have now have to decide what our next move will be. We think gold and silver are heading higher, however we are going to wait a while before taking further long positions. Both metals experienced quite a shake up in trading yesterday, so we have decided to wait for now and will perhaps begin building another long position next week, or on any significant weakness in the price. More details will follow over the weekend, when we have a clearer idea on where the markets are heading and how we are going to position our trades. Regards,

SK Options Trading www.skoptionstrading.com

10 November 2010
SK OptionTrader Trading Signal: Further Stops Triggered Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Stop @ $5.00 Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Stop @ $7.75, Sold at $7.75 Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Stop @ $3.75, Sold at $3.75 Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Stop @ $5.00 Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Stop @ $7.75, Sold at $7.75 Long Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Stop @ $3.60, Sold at $3.60 Long Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Stop @ $2.40, Sold at $2.40 Long Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Stop @ $2.00, Sold at $2.00 Long Jan-11 $140 GLD Calls @ $1.80 (5 Units allocated) Stop @ $3.60, Sold at $3.60 Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated)

This leaves 70 units, or 70% of our portfolio in cash. Further stops have been triggered: Stop triggered on Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Stop @ $2.40, Sold at $2.40. Stop triggered on Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Stop @ $2.00, Sold at $2.00. Stop triggered on Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Stop @ $3.60, Sold at $3.60 Stop triggered on Jan-11 $140 GLD Calls @ $1.80 (5 Units allocated) Stop @ $3.60, Sold at $3.60 Stop triggered on Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Stop @ $7.75, Sold at $7.75 Stop triggered on Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Stop @ $7.75, Sold at $7.75 Stop triggered on Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Stop @ $3.75, Sold at $3.75 An update will follow before markets open again tomorrow.

Regards,

SK Options Trading www.skoptionstrading.com

10 November 2010
SK OptionTrader Trading Signal: Stop Triggered Jan-11 $135 GLD Calls Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Stop @ $5.00 Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Stop @ $7.75 Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Stop @ $7.00 Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Stop @ $6.25 Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Stop @ $3.75 Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Stop @ $5.00 Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Stop @ $7.75 Long Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Stop @ $3.60 Long Jan-11 $135 GLD Calls @ $4.02 (5 Units allocated) Stop @ $5.90, Sold @ $5.90 Long Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Stop @ $2.40 Long Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Stop @ $2.00 Long Jan-11 $140 GLD Calls @ $1.80 (5 Units allocated) Stop @ $3.60 Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated)

This leaves 25 units, or 25% of our portfolio in cash. We have been stopped out on our Jan-11 $135 GLD Calls that we bought $4.02 (5 Units allocated), selling them for $5.90, a 46% profit.

Regards,

SK Options Trading www.skoptionstrading.com

10 November 2010
SK OptionTrader Trading Signal: Sell GLD $136, $138 Mar-11 Calls Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Stop @ $5.00 Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Stop @ $7.75 Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Stop @ $7.00, Sold $7.65 Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Stop @ $6.25, Sold at $6.60 Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Stop @ $3.75 Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Stop @ $5.00 Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Stop @ $7.75 Long Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Stop @ $3.60 Long Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Stop @ $2.40 Long Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Stop @ $2.00 Long Jan-11 $140 GLD Calls @ $1.80 (5 Units allocated) Stop @ $3.60 Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated)

This leaves 35 units, or 35% of our portfolio in cash. We have decided to sell our GLD $136 and $138 Mar-11 Calls before they are stopped out, since we are concerned with the recent fall in gold and therefore would like to exit these positions before the close. We have sold our Mar-11 $136 GLD Calls which we bought for $4.55 (5 Units allocated) and had a stop @ $7.00, but we have now sold for $7.65, making a 68.13% profit. We have sold our Mar-11 $138 GLD Calls which we bought for $4.30 (5 Units allocated) and had a stop @ $6.25, but we have now sold at $6.60, making a 45.34% profit.

Regards,

SK Options Trading www.skoptionstrading.com

10 November 2010
SK OptionTrader Trading Signal: Stop Triggered Jan-11 $135 GLD Calls Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Stop @ $5.00 Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Stop @ $7.75 Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Stop @ $7.00 Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Stop @ $6.25 Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Stop @ $3.75 Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Stop @ $5.00 Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Stop @ $7.75 Long Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Stop @ $3.60 Long Jan-11 $135 GLD Calls @ $4.02 (5 Units allocated) Stop @ $5.90, Sold @ $5.00 Long Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Stop @ $2.40 Long Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Stop @ $2.00 Long Jan-11 $140 GLD Calls @ $1.80 (5 Units allocated) Stop @ $3.60 Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated)

This leaves 25 units, or 25% of our portfolio in cash. We have been stopped out on our Jan-11 $135 GLD Calls that we bought $4.02 (5 Units allocated), selling them for $5.90, a 46% profit.

Regards,

SK Options Trading www.skoptionstrading.com

10 November 2010
SK OptionTrader Trading Signal: Stop Triggered on Mar-11 $31 SLW Calls Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Stop @ $5.00 Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Stop @ $7.75 Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Stop @ $7.00 Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Stop @ $6.25 Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Stop @ $3.75 Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Stop @ $5.00 Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Stop @ $7.75 Long Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Stop @ $3.60 Long Jan-11 $135 GLD Calls @ $4.02 (5 Units allocated) Stop @ $5.90 Long Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Stop @ $2.40 Long Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Stop @ $2.00 Long Mar-11 $31 SLW Calls @ $2.98 (5 Units allocated) Stop @ $5.75, SOLD Long Jan-11 $140 GLD Calls @ $1.80 (5 Units allocated) Stop @ $3.60 Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated)

This leaves 20 units, or 20% of our portfolio in cash. Our stop on Mar-11 $31 SLW Calls has been triggered so we have sold the position at $5.75. Having bought at $2.98 this gives us a 93% profit on the trade.

Regards,

SK Options Trading www.skoptionstrading.com

9 November 2010
SK OptionTrader Update: Gold Surges Past $1400, Raising Stops Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Stop @ $5.00 Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Stop @ $7.75 Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Stop @ $7.00 Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Stop @ $6.25 Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Stop @ $3.75 Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Stop @ $5.00 Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Stop @ $7.75 Long Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Stop @ $3.60 Long Jan-11 $135 GLD Calls @ $4.02 (5 Units allocated) Stop @ $5.90 Long Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Stop @ $2.40 Long Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Stop @ $2.00 Long Mar-11 $31 SLW Calls @ $2.98 (5 Units allocated) Stop @ $5.75 Long Jan-11 $140 GLD Calls @ $1.80 (5 Units allocated) Stop @ $3.60 Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated) This leaves 15 units, or 15% of our portfolio in cash. Watching gold surge past $1400 is great to see, as is silver breaking $28 and some great earnings from SLW. However the markets have taken another step up and therefore so must our stops, and we have adjusted them to new levels as detailed above to lock in further profits. We expect further gains in precious metals this week, and we will keep moving up our stops accordingly. We have no plans to actively start selling and taking profits as of yet.

Regards,

SK Options Trading www.skoptionstrading.com

8 November 2010
SK OptionTrader Update: New Stops On Open Positions Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Stop @ $4.60 Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Stop @ $6.35 Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Stop @ $5.80 Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Stop @ $5.35 Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Stop @ $3.10 Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Stop @ $4.60 Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Stop @ $6.35 Long Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Stop @ $3.00 Long Jan-11 $135 GLD Calls @ $4.02 (5 Units allocated) Stop @ $4.85 Long Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Stop @ $1.85 Long Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Stop @ $1.50 Long Mar-11 $31 SLW Calls @ $2.98 (5 Units allocated) Stop @ $3.90 Long Jan-11 $140 GLD Calls @ $1.80 (5 Units allocated) Stop @ $3.00 Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated) This leaves 15 units, or 15% of our portfolio in cash.

We are sitting on some good profits in our open positions, so we are putting in the stops detailed above in an attempt to secure some of these gains. We still think gold prices are heading higher, we are just entering these stops as a precaution, and we will move them up as and when we see fit. As always feel free to ask any questions.

Regards,

SK Options Trading www.skoptionstrading.com

5 November 2010
SK OptionTrader Trading Signal: SPY & DIA Bearish Credit Spreads Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Long Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Long Jan-11 $135 GLD Calls @ $4.02 (5 Units allocated) Long Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Long Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Long Mar-11 $31 SLW Calls @ $2.98 (5 Units allocated) Long Jan-11 $140 GLD Calls @ $1.80 (5 Units allocated) Long SPY Dec 18 '10 $130 Call @ $0.31/Short SPY Dec 18 '10 $129 Call @ $0.43 (10 Units allocated) Long DIA Dec 18 '10 $121 Call @ $0.20/Short DIA Dec 18 '10 $120 Call $0.31 (10 Units allocated) This leaves 15 units, or 15% of our portfolio in cash. We hereby signal to initiate the following credit spread positions, as previously discussed in our recent update. Buy SPY Dec 18 '10 $130 Call @ $0.31, Sell SPY Dec 18 '10 $129 Call @ $0.43, Net Credit $0.12. 10 Units allocated. Buy DIA Dec 18 '10 $121 Call @ $0.20, Sell DIA Dec 18 '10 $120 Call $0.31, Net Credit $0.11. 10 Units allocated. Stops on our other current positions will follow in a future update. Regards,

SK Options Trading www.skoptionstrading.com

4 November 2010
SK OptionTrader Update: Prepare To Take Bearish Credit Spreads On Equities Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Long Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Long Jan-11 $135 GLD Calls @ $4.02 (5 Units allocated) Long Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Long Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Long Mar-11 $31 SLW Calls @ $2.98 (5 Units allocated) Long Jan-11 $140 GLD Calls @ $1.80 (5 Units allocated) This leaves 35 units, or 35% of our portfolio in cash. In our opinion, QE2 was not large enough to trigger a further rally in equity prices. The S&P 500 is overbought and up against resistance at around 1200. In addition to this, there appears to be more trouble brewing in Europe with the Irish-Bund spreads hitting a lifetime high of over 500 bps. The Fed has made it clear they want to keep stock prices high, and so although we are not brave enough to stand in front of Bernanke & Co. efforts and take an outright short position on the stock market, we are now comfortable with taking a bearish credit spread position on SPY, the S&P 500 ETF. For those subscribers who may not be familiar with this strategy, here is a brief explanation. However we encourage you to do your own research and ensure that you fully understand the mechanics of this type of trade before attempting to execute it. A credit spread trade involves a purchase of one option and a sale of another option in the same class and expiration but different strike prices. Investors receive a net credit for entering the position, and want the spreads to narrow or expire for profit. Our bearish credit spread on SPY will consist of selling an out of the money call option and buying an out of the money call option with a higher strike price. Since we expect both calls to expire worthless, we should pocket the net credit as profit when the contracts expire. Credit spreads are negative vega (volatility premium) since, if the price of the underlying doesn't change, the trader will tend to make money as volatility goes down. They are also negative theta (time premium) in that, if the price of the underlying doesn't change, the trader will tend to make money just by the passage of time. To put this trade as simply as we can: We are betting that SPY does not rise much between now and the December 17th close and if we are right we collect a modest premium. We will probably look to place the trade towards the end of the trading session.

Regards,

SK Options Trading www.skoptionstrading.com

4 November 2010
SK OptionTrader Updatel: FOMC Announces QE2 Package Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Long Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Long Jan-11 $135 GLD Calls @ $4.02 (5 Units allocated) Long Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Long Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Long Mar-11 $31 SLW Calls @ $2.98 (5 Units allocated) Long Jan-11 $140 GLD Calls @ $1.80 (5 Units allocated) This leaves 35 units, or 35% of our portfolio in cash. Just over three hours ago the Federal Open Market Committee announced a quantitative easing package of $600 billion, the much anticipated QE2. You can read the full statement here: http://www.federalreserve.gov/newsevents/press/monetary/20101103a.htm however here are what we view as some of the most important lines: Longer-term inflation expectations have remained stable, but measures of underlying inflation have trended lower in recent quarters. This shows that the Federal Reserve is not really concerned with inflation as a problem, and so is comfortable with creating more money via quantitative easing. In fact rather than be concerned with the threat of inflation caused by printing trillions of dollars, the Fed is more concerned with the lack of inflation. Therefore it is likely that the Fed may continue to use more QE in the future, due to its perception that the risk of rampant resulting inflation is low and the fact that it has otherwise run out of monetary tools to tackle the current situation. However expectations, even long run expectation can adjust quickly. Therefore we see a risk that these currently stable and relatively low long run inflation expectations could rapidly adjust upwards particularly if the Fed continues with massive QE programs. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month So the Fed just edged above widespread expectations of $500 billion, as we have thought they would. This is less that QE1, but still sufficient to prevent equities from tumbling and to maintain the "QE2 Premium" that was already larger built in to precious metal prices. However although a great deal of the $600 billion is already priced in to gold, the important indication to take from the statement is that the FOMC "will adjust the program as needed to best foster maximum employment and price stability". That opens the door for yet more QE down the road, and the markets future anticipation of this will likely lead to further appreciation in the gold price. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent....likely to warrant exceptionally low levels for the federal funds rate for an extended period. The single biggest threat we see to this gold bull market is rising real interest rates. However the continued assurance of the Fed that rates are staying exceptionally low means that this a threat that we will not have to face for some time. Also of note is that all but one of the the committee members (Thomas Hoenig) voted in favour of the action. Since Hoenig voting against QE is nothing new, this confirms that the FOMC is standing solid in its approach and therefore is unlikely to change its strategy any time soon.

Our current open positions are all trading at about the same prices as we purchased, give or take 10% or so either way on some. Therefore if you are a new subscriber or just have not had a chance to purchase them, now could be a good time.

Regards,

SK Options Trading www.skoptionstrading.com

4 November 2010
SK OptionTrader Trading Signal: Buy Jan-11 GLD $140 Calls Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Long Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Long Jan-11 $135 GLD Calls @ $4.02 (5 Units allocated) Long Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Long Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Long Mar-11 $31 SLW Calls @ $2.98 (5 Units allocated) Long Jan-11 $140 GLD Calls @ $1.80 (5 Units allocated) This leaves 35 units, or 35% of our portfolio in cash.

Gold has fallen sharply, so we are taking to opportunity to add to our positions and hereby signal to buy GLD Jan 22 '11 $140 Calls at $1.80 with 5 units allocated to this trade.

Regards,

SK Options Trading www.skoptionstrading.com

3 November 2010
SK OptionTrader Update: Countdown To QE2 Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Long Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Long Jan-11 $135 GLD Calls @ $4.02 (5 Units allocated) Long Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Long Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Long Mar-11 $31 SLW Calls @ $2.98 (5 Units allocated) This leaves 40 units, or 40% of our portfolio in cash. With the Fed due to release a statement at around 1815GMT, all eyes are on the announcement of additional quantitative easing, and how much it will be. Given our large number of open trades and long exposure to gold and silver, it is pretty clear what camp we are in. We think the Fed will announce QE2, and a number big enough to spark a jump in precious metals. That is why we have been layering into long positions over the past couple of weeks or so. We usually layer into and out of positions as we find it offers a better risk reward ratio. By beginning with purchasing small positions on the basis of a particular opinion we have on where markets are headed, and stepping up our purchases on weakness, we can not only often get into trades at a discount, but also check to ensure things are progressing to plan. If at any point there is a change in the market or something happens that discredits our original thinking, we do not have too much money at risk. We also believe that this dose of QE2 will coincide with a top in equities. We may look to take some bearish positions later this week depending on how things pan out. Regards,

SK Options Trading www.skoptionstrading.com

2 November 2010 SK OptionTrader Trading Signal: Buy GLD, SLV, SLW Call Options Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) Long Jan-11 $140 GLD Calls @ $2.50 (5 Units allocated) Long Jan-11 $135 GLD Calls @ $4.02 (5 Units allocated) Long Apr-11 $27 SLV Calls @ $1.40 (5 Units allocated) Long Apr-11 $28 SLV Calls @ $1.17 (5 Units allocated) Long Mar-11 $31 SLV Calls @ $2.98 (5 Units allocated) This leaves 40 units, or 40% of our portfolio in cash.

As detailed in our recent update, we are increasing our long position on precious metals; We hereby signal to buy GLD Jan 22 '11 $140 Calls @ $2.50 with 5 units allocated to this trade. We hereby signal to buy GLD Jan 22 '11 $135 Calls @ $4.02 with 5 units allocated to this trade. We hereby signal to buy SLV Apr 16 '11 $27 Calls @ $1.40 with 5 units allocated to this trade. We hereby signal to buy SLV Apr 16 '11 $28 Calls @ $1.17 with 5 units allocated to this trade. We hereby signal to buy SLW Mar 19 '11 $31 Calls @ $2.98 with 5 units allocated to this trade. As always let us know if you have any questions or comments. Regards,

SK Options Trading www.skoptionstrading.com

1 November 2010 SK OptionTrader Update: High Chance Gold Correction Is Over Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) This leaves 65 units, or 65% of our portfolio in cash. As we watch gold rally strongly in Hong Kong, and having seen the yellow metal bounce off $1320 twice last week, we are now of the opinion that the gold correction is behind us. Although there is a small chance of further downside, we believe this is limited to the lows formed last week. We therefore intend to purchase some January 2011 out of the money GLD calls when markets open in the US. Looking towards silver, one should note that it is currently breaking up, or at least is in the process of breaking up, to make a new high and therefore could run from here. We therefore also intend to purchase long position on silver, via out of the money April 2011 calls on SLV. In addition to this we are planning to purchase similar call options on SLW, which we view as a leveraged play on silver itself. With their Q3 earnings due out soon, combined with a rally in silver prices, the stock should do very well in the next few weeks. Although we normally avoid taking positions on precious metals stocks since we do not want the risks associated with mining companies, Silver Wheaton is somewhat of an exception since they are not involved in the actual mining of silver itself, simply purchasing it at a discount from larger miners. As a side note we think that QE2 could be the last shot of adrenaline for the equities markets, and indeed we could now be looking at a major top. However rather than shorting the S&P or the DOW, we are considering some bearish credit spread positions. But we will cover this in more detail, as well as possibly getting some bullish credit spreads on gold, another time.

Regards,

SK Options Trading www.skoptionstrading.com

29 October 2010 SK OptionTrader Update: Gold Finds Some Support at $1320 Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) This leaves 65 units, or 65% of our portfolio in cash Gold prices appear to have found some support around the $1320 area, having bounced on this level a few times in recent trading. As planned we have picked up some out of the money March calls on GLD. However we will probably not be buying more positions in the short term unless gold falls further. Silver too has bounced back, although it has been more overbought than gold this whole time so we have so far refrained from taking a position. If silver prices were to drop, we would be buyers on the dip, but at present we are content to just watch it. The furthest we think gold could fall in the short term is to around $1280, but we think it is more likely that the yellow metal will stay above $1300. If gold prices simply go sideways for a while, we will be looking to pick up some bullish credit spreads on GLD, perhaps in the November contracts, to pocket some modest short term gains whilst gold is taking a breather. If you have any questions or comments on the above, as always just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

28 October2010 SK OptionTrader Trading Signal: BUY Mar-11 $135, $140 GLD Calls Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) Long Mar-11 $140 GLD Calls @ $3.10 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.55 (5 Units allocated) This leaves 65 units, or 65% of our portfolio in cash.

We hereby signal to buy more GLD Mar 19th 2011 $140 Calls at $3.10 with 5 units allocated to this trade. We also hereby signal to buy more GLD Mar 19th 2011 $135 Calls at $4.55 with 5 units allocated to this trade This is part of our previously discussed strategy to layer into a large long position on gold during this period of weakness.

Regards,

SK Options Trading www.skoptionstrading.com

27 October 2010 SK OptionTrader Trading Signal: BUY Mar-11 $145 GLD Calls Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) Long Mar-11 $145 GLD Calls @ $2.35 (5 Units allocated) This leaves 75 units, or 75% of our portfolio in cash.

We hereby signal to buy GLD Mar 19th 2011 $145 Calls at $2.35 with 5 units allocated to this trade. This is part of our previously discussed strategy to layer into a large long position on gold during this period of weakness.

Regards,

SK Options Trading www.skoptionstrading.com

26 October 2010
SK OptionTrader Trading Signal: BUY Mar-11 $138 GLD Calls Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) Long Mar-11 $138 GLD Calls @ $4.30 (5 Units allocated) This leaves 80 units, or 80% of our portfolio in cash. We hereby signal to buy the GLD March 19th 2011 $138 call options at $4.30, with 5 units allocated to this trade. This is part of our previously discussed strategy of layering into a large long position on gold. Regards,

SK Options Trading www.skoptionstrading.com

25 October 2010 SK OptionTrader Update: Continue To Build Gold Position This Week Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) This leaves 85 units, or 85% of our portfolio in cash. Having picked up the three positions listed above on Friday, its nice to see gold trading some $20 higher than where we purchased those call options just before the weekend. This update is simply a brief note to confirm that this week we are continuing with our strategy to layer into another large gold position on any weakness in the price. This position will consist mainly of March 2011 OTM GLD calls, and perhaps January calls as well if gold falls further. We may also look to pick up some bullish credit spread positions should the markets present an attractive opportunity. As usual, if you have any questions or comments on the above just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

23 October 2010
SK OptionTrader Trading Signal: BUY Mar-11 $135, $136 GLD Calls

Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) Long Mar-11 $135 GLD Calls @ $4.90 (5 Units allocated) Long Mar-11 $136 GLD Calls @ $4.55 (5 Units allocated) This leaves 85 units, or 85% of our portfolio in cash.

We hereby signal to BUY March 2011 $135 GLD calls at $4.90 with 5 units allocated to this trade. We also hereby signal to BUY March 2011 $136 GLD calls at $4.55 with 5 units allocated to this trade. As always, any questions just ask.

Regards,

SK Options Trading www.skoptionstrading.com

23 October 2010
SK OptionTrader Trading Signal: BUY Mar-11 $140 GLD Calls

Current Positions: Long Mar-11 $140 GLD Calls @ $3.55 (5 Units allocated) This leaves 95 units, or 95% of our portfolio in cash.

We hereby signal to BUY March 2011 $140 GLD calls at $3.55 with 5 units allocated to this trade.

As always, any queries just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

22 October 2010
SK OptionTrader Update: Gold No Longer Overbought, Time To Start Buying Again

Current Positions: We currently have no open positions. This leaves 100 units, or 100% of our portfolio in cash.

It has been a busy time for SK OptionTrader recently, but we have been enjoying some great results. In the last 6 weeks, we have opened and closed 12 profitable trades with an average profit of over 70% per trade. However now having exited all of our gold positions in the belief that gold was due for a correction/consolidation period, and being at least partially vindicated by the $60 drop in gold prices over the last 5 trading sessions, we must now address the issue of where best to place our money next. Looking at the technical picture, gold is no longer overbought, with the RSI being about neutral at 51.06 and some support coming in around $1325. Despite the fact that gold is not oversold, we are a lot more comfortable with the prospect of going long on gold once again than we were a week ago. The recent drop in gold is more down to speculative profit taking, than any real change in the fundamental bullish factors that have been driving gold higher. We believe the Fed is still going to announce a massive quantitative easing program on 2nd-3rd November and gold prices will continue to be strong for the next 3 months or so at least. Therefore we intend to start layering into another large long position on gold, beginning with buying out of the money March 2011 and possibly June 2011 GLD call options when markets open. If gold prices sell off more we will move to build our position more aggressively, and acquire January 2011 calls. In addition to this, if gold prices appear sufficiently oversold we may implement some bullish credit spread position, but we will cover this in more detail closer to the time if we choose to go down this route. As always if you have any questions or comments on the above then just let us know. Regards,

SK Options Trading www.skoptionstrading.com

20 October 2010
SK OptionTrader Trading Signal: More Stops Triggered Current Positions: Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) STOP TRIGGERED @ $4.60, SOLD @ $3.45 Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) STOP TRIGGERED @ $2.2, SOLD @ $2.20 Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) STOP TRIGGERED @ $5.00, SOLD @ $3.95 This leaves 85 units, or 85% of our portfolio in cash. Gold has opened lower so since we had stops in place we have exited all our remaining positions. In both our remaining gold options, since gold had fallen so significantly premarket, we were unable to sell the calls at the stop level, so the next best available price was taken. We have still banked profits of 65.87%, 100% and 23.43% respectively. We will wait until after markets close before setting out a new trading strategy.

Regards,

SK Options Trading www.skoptionstrading.com

18 October 2010
SK OptionTrader Update: Remaining Open Positions Likely To Be Closed Today Current Positions: Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) STOP @ $4.60 Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) STOP @ $2.2 Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) STOP @ $5.00 This leaves 85 units, or 85% of our portfolio in cash With gold and silver both being down slightly in London from Fridays close, it is likely that our stops will be triggered and we will close out our three remaining positions in todays trading. If the above options open below our stops, we will simply take the best price we can as soon as possible when trading begins. We will then look to begin building a long position on gold and silver again once prices have corrected slightly. As a side note, we have slightly changed the name of this service from OptionTrader to SK OptionTrader, simply to avoid being confused with other similarly named services. If you have any questions or comments, just let us know. Regards,

SK Options Trading www.skoptionstrading.com

16 October 2010
OptionTrader Trading Signal: Stops Triggered Current Positions: Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) STOP @ $4.60 Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) STOP TRIGGERED @ $7.10 SOLD Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) STOP @ $2.2 Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) STOP TRIGGERED @ $6.00 SOLD Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) STOP TRIGGERED @ $5.40 SOLD Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) STOP @ $5.00 Long GLD Dec-10 $135 Calls @ $2.15 (5 Units allocated) STOP TRIGGERED @ $4.00 SOLD Long GLD Dec-10 $134 Calls @ $2.37 (5 Units allocated) STOP TRIGGERED @ $4.30 SOLD This leaves 85 units, or 85% of our portfolio in cash We have had multiple stops triggered by the drop in gold prices. Therefore we are closing all trades where a stop has been triggered. The prices that we have closed the trades at are still current, as in there is still a bid in the in the market at these prices right now. We will post an update after the markets close, its possible we will be stopped out on further positions if the market continues to fall. Let us know if you have any questions or comments. Regards,

SK Options Trading

www.skoptionstrading.com

15 October 2010
OptionTrader Update: Raise Stops Again, Lock in Further Profits Current Positions: Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) STOP @ $4.60 Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) STOP @ $7.10 Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) STOP @ $2.2 Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) STOP @ $6.00 Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) STOP @ $5.40 Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) STOP @ $5.00 Long GLD Dec-10 $135 Calls @ $2.15 (5 Units allocated) STOP @ $4.00 Long GLD Dec-10 $134 Calls @ $2.37 (5 Units allocated) STOP @ $4.30 The leaves 60 units, or 60% of our portfolio in cash. After another trading session where our positions gained yet again, we are edging up our stop orders to follow. All of our open positions are in profit, with the average gain being 132.33%, and the highest paper profit being 174.04%, the lowest being 90.62%. As tempting as it is to take these fantastic gains, we are sticking with our strategy and simply moving our stops up as the market continues to play our in our favour. It is also tempting to get wrapped up in the euphoria of such gains, and commit remaining cash to further long positions in order to maximise the total return. However again, we are keeping our discipline and will not buy any more gold or silver positions whilst the charts are so drastically overbought. We will however be prepared to buy should they undergo a correction. If you have any questions or comments feel free to let us know. Regards,

SK Options Trading

www.skoptionstrading.com

14 October 2010
OptionTrader Update: Gold Makes Another All Time High, Time To Raise Stops Current Positions: Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) STOP @ $4.35 Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) STOP @ $6.75 Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) STOP @ $2.10 Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) STOP @ $5.65 Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) STOP @ $5.10 Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) STOP @ $4.80 Long GLD Dec-10 $135 Calls @ $2.15 (5 Units allocated) STOP @ $3.75 Long GLD Dec-10 $134 Calls @ $2.37 (5 Units allocated) STOP @ $4.10 The leaves 60 units, or 60% of our portfolio in cash. Gold prices posted strong gains in the New York trading session and we are watching the yellow metal continue to climb in Sydney and Hong Kong to make new all time highs. We have therefore revised our stops on our open positions as shown above, since we are sitting on substantial profits ranging from 70% to 150%. Our strategy is only to add to our current positions on weakness in the gold price and keep raising our stops, trailing behind gold to continually secure more profits. This limits our downside but keeps us open to benefit from further rises in gold. With the US dollar making a break down below 77 in the last few hours, gold could continue to gain and we could be in for a great end to the week.

Let us know if you have any questions or comments.

Regards,

SK Options Trading

www.skoptionstrading.com

10 October 2010
OPTIONTRADER UPDATE: Raising Stops, QE2 Priced In? Current Positions: Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) STOP @ $3.35 Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) STOP @ $5.35 Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) STOP @ $1.75 Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) STOP @ $4.20 Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) STOP @ $3.75 Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) STOP @ $3.70 Long GLD Dec-10 $135 Calls @ $2.15 (5 Units allocated) STOP @ $2.70 Long GLD Dec-10 $134 Calls @ $2.37 (5 Units allocated) STOP @ $3.10 The leaves 60 units, or 60% of our portfolio in cash. We have raised all of our stops on our above positions, and added stops to our positions in the Jan11 $135, Dec-10 $135 and Dec-10 $134 calls. We are becoming more cautious since there is increasing talk of more quantitative easing by the Fed (dubbed QE2), and although this is bullish for gold we have become concerned that much of its effect may already be priced in. When we first started acquiring call options on GLD back in August in anticipation of QE2, there was faint talk of the possibility of some QE2 in late 2010. Now the talk has changed from not if there will be more quantitative easing, but how much it will be and when it will be announced. Estimates range from $500billion to over $1trillion, and it is hard to find investors who think the Fed will refrain from any quantitative easing in 2010. Therefore the probability of QE2 is increasing, since now the Fed will have to do some quantitative easing just to keep markets at their current levels, since investors have already priced some QE into the markets. As for how much QE the markets have priced in, we are not sure. Perhaps it is around $500billion. This would mean that the Fed would have to announce QE of more than $500billion to boost markets further, and less than $500billion could cause market to drop. In fact, even if the Fed announces QE measures inline with investor expectations, the markets could still fall as many speculative long positions will be closed based on the strategy of buying the rumor and selling the news. This is the fundamental reasoning behind our decision to keep raising our stops up behind our GLD calls, which are all in profit, and to refrain from purchasing additional positions at current levels. This is supported by technical analysis that shows that gold is overbought, but since gold can still rally even when it is overbought we are happy to hold our calls for the upside, whilst limiting the downside with our stop orders. If you have any questions or comments on the above, please just let us know. Regards,

SK Options Trading

www.skoptionstrading.com

8 October 2010
OPTIONTRADER TRADING SIGNAL: Stop Triggered on SLV Jan-11 $24 Calls Current Positions: Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) STOP @ $2.80 Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) STOP @ $4.80 Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) STOP TRIGGERED @ $0.80 Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) STOP @ $1.45 Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) STOP @ $3.90 Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) STOP @ $3.50 Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) Long GLD Dec-10 $135 Calls @ $2.15 (5 Units allocated) Long GLD Dec-10 $134 Calls @ $2.37 (5 Units allocated) This gives us 60 units, or 60% of our trading portfolio in cash. We hereby signal to close our position in SLV Jan-11 $24 Calls purchased at $0.60 with 5 Units allocated since our stop has been triggered at @ $0.80. This has produced a 33.33% profit on the trade. We are getting a lot emails with regard to buying this weakness today. As of yet we will wait until tomorrow before considering any more purchases.

Regards,

SK Options Trading

www.skoptionstrading.com

7 October 2010
OPTIONTRADER UPDATE: New Stops (Revised) Current Positions: Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) STOP @ $2.80 Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) STOP @ $4.80 Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) STOP @ $0.80 Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) STOP @ $1.45 Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) STOP @ $3.90 Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) STOP @ $3.50 Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) Long GLD Dec-10 $135 Calls @ $2.15 (5 Units allocated) Long GLD Dec-10 $134 Calls @ $2.37 (5 Units allocated) This leaves 55 units, or 55% of our portfolio in cash Due to further rises in the markets today, our stops have been revised as shown above.

Regards,

SK Options Trading

www.skoptionstrading.com

7 October 2010
OPTIONTRADER UPDATE: New Stops Current Positions: Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) STOP @ $2.80 Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) STOP @ $4.80 Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) STOP @ $1.80 Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) STOP @ $1.45 Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) STOP @ $3.90 Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) STOP @ $3.50 Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) Long GLD Dec-10 $135 Calls @ $2.15 (5 Units allocated) Long GLD Dec-10 $134 Calls @ $2.37 (5 Units allocated) This leaves 55 units, or 55% of our portfolio in cash Due to further rises in the markets today, our stops have been revised as shown above.

Regards,

SK Options Trading

www.skoptionstrading.com

6 October 2010
OPTIONTRADER UPDATE: Using Stops To Lock Profits Current Positions: Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) STOP @ $2.80 Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) STOP @ $7.70 Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) STOP @ $1.45 Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) STOP @ $3.90 Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) STOP @ $3.50 Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) Long GLD Dec-10 $135 Calls @ $2.15 (5 Units allocated) Long GLD Dec-10 $134 Calls @ $2.37 (5 Units allocated) This leaves 55 units, or 55% of our portfolio in cash In the past few hours, gold prices have traded near $1350, which was our target for this rally. Now that our target has been achieved, we are adopting a slightly more cautions approach to our positions. We have placed stop orders on some of our positions in order to lock in some profits, as detailed in the summary of our open positions above. Please note that these stops are not guaranteed and options can be very volatile, therefore the actual price that the sell order is executed at may vary from that stated above. We are not saying gold prices can't still rise from here, but we are simply observing that we have good paper profits and therefore it is prudent to lock in some of these gains. We would be buyers of out of the money January 2011 GLD calls on any price weakness. However we are going to refrain from purchasing options with a closer expiration date since the time premium decay (theta) on these positions would be significant and accelerating, thereby limiting potential profits. We expect the Fed to announce another round of quantitative easing before year end, and this will likely be a catalyst for a further rise in the gold price.

As always, feel free to send us any questions or comments you have on the above.

Regards,

SK Options Trading

www.skoptionstrading.com

6 October 2010
OPTIONTRADER TRADING SIGNAL: Sell GLD Dec-10 $125 Calls Current Positions: Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) Long GLD Dec-10 $135 Calls @ $2.15 (5 Units allocated) Long GLD Dec-10 $134 Calls @ $2.37 (5 Units allocated) This leaves 55 units, or 55% of our portfolio in cash We hereby signal to sell our position in GLD Dec-10 $125 Calls at $7.30 This gives us a profit of 8.96% on the purchase we made at $6.70 with 10 Units allocated and a profit 82.50% on the calls we bought at $4.00 with 5 Units allocated. The reason we have chosen to take profits on these trades is that the options are in the money now and therefore do not offer us as much leverage to gold. Gold is also looking overbought so we are wary or a minor correction and/or consolidation in the short term. Regards,

SK Options Trading

www.skoptionstrading.com

5 October 2010
OPTIONTRADER: Profit Adjustment In the previous email, we stated that the gross profit made on GLD $130 December 2010 Calls from buying at $3.68 and having purchased them for $2.70 was 42.96% when in fact it was 36.30%. We apologise for this typing error.

Regards,

SK Options Trading

www.skoptionstrading.com

5 October 2010
OPTIONTRADER TRADING SIGNAL: Sell GLD Jan-11, Dec-10 $130 Calls Current Positions: Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) Long GLD Dec-10 $135 Calls @ $2.15 (5 Units allocated) Long GLD Dec-10 $134 Calls @ $2.37 (5 Units allocated) This leaves 40 units, or 40% of our portfolio in cash In view of the fact that gold is overbought, the USD is oversold and we are sitting on some decent profits, we hereby signal to sell our position in GLD $130 December 2010 Calls at $3.68, having purchased them for $2.70, banking a profit of 42.96%. We also signal to close out position in the January 2011 $130 calls, selling them for $5.00 having bought at $3.70, making a 35.14% profit on the trade. Let us know if you have any questions on the above. Regards,

SK Options Trading

www.skoptionstrading.com

4 October 2010
OPTIONTRADER UPDATE: Taking Some Profits on GLD Calls Current Positions: Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) Long GLD Dec-10 $130 Calls @ $2.70 (5 Units allocated) Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) Long GLD Dec-10 $135 Calls @ $2.15 (5 Units allocated) Long GLD Dec-10 $134 Calls @ $2.37 (5 Units allocated) This leaves 30 units, or 30% of our portfolio in cash In view of the fact that gold is overbought, the USD is oversold and we are sitting on some decent profits in some of our positions, we may look to bank some of these profits by closing a couple of positions when markets open. Let us know if you have any questions on the above. Regards,

SK Options Trading www.skoptionstrading.com

2 October 2010
OPTIONTRADER TRADING SIGNAL: BUY GLD Dec-10 $134, $135 Calls Current Positions: Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) Long GLD Dec-10 $130 Calls @ $2.70 (5 Units allocated) Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) Long GLD Dec-10 $135 Calls @ $2.15 (5 Units allocated) Long GLD Dec-10 $134 Calls @ $2.37 (5 Units allocated) This leaves 30 units, or 30% of our portfolio in cash We hereby signal to buy GLD December $135 Calls @ $2.15 with 5 Units allocated to this trade. We also hereby signal to buy GLD December $134 Calls @ $2.37 with 5 Units allocated to this trade. Regards,

SK Options Trading www.skoptionstrading.com

2 October 2010
OPTIONTRADER TRADING SIGNAL: BUY GLD Jan-11 $135 Calls Current Positions: Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) Long GLD Dec-10 $130 Calls @ $2.70 (5 Units allocated) Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) Long GLD Jan-11 $135 Calls @ $3.20 (5 Units allocated) This leaves 40 units, or 40% of our portfolio in cash We hereby signal to buy GLD January 2011 $135 Calls @ $3.20 with 5 Units allocated to this trade.

Regards,

SK Options Trading www.skoptionstrading.com

2 October 2010
OPTIONTRADER TRADING SIGNAL: SELL GLD Jan-11 $115 Calls Current Positions: Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) Long GLD Dec-10 $130 Calls @ $2.70 (5 Units allocated) Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) This leaves 45 units, or 45% of our portfolio in cash We hereby signal to sell our GLD January 2011 $115 Calls at $15.00. This gives us a gain of 7.14% on the position we bought at $14.00 with 10 Units allocated and a 50% gain on the position we purchased at $10.00 with 5 Units allocated. Regards,

SK Options Trading www.skoptionstrading.com

2 October 2010
OPTIONTRADER UPDATE: Gold Overbought, USD Oversold Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) Long GLD Dec-10 $130 Calls @ $2.70 (5 Units allocated) Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. Despite looking toppy and overbought, gold continue to make gains, currently trading above $1316/ounce. The US dollar is continuing to fall and has now clearly broken its long term support level at 80, however it appears to be in the oversold zone. The question is how to proceed from this point, with gold prices being technically overbought and the USD being oversold. The answer is: cautiously. This may not be as definitive an answer as we would like, but its the best we have at this point. It is hard to get a black and white answer on where we go from here since we have a couple of conflicting technical arguments. Although gold is overbought now, it was also overbought at $1280. Furthermore, this time last year it was overbought at $1070 and $1160 whilst charging up to $1225. Our point is that gold can still rally handsomely even if it is overbought, so we are both cautious with regard to taking further long positions and taking profits prematurely. Of course this uncertainty is further underpinned by the fact that we are in uncharted waters for gold now, and so it is difficult is determine upcoming resistance levels. We have come to the conclusion that we should continue to be long gold for the time being, however we will be taking profits on some of our in the money call options, most notably the $115 Jan11 positions since they are no longer providing sufficient leverage to rising gold prices. These positions will be replaced with GLD calls that are more out of the money and we will continue to look to buy more calls on dips as gold moves towards our target of $1350. However we are keeping a very close eye on the market and may look to be conservative and begin taking profits sooner rather that later. If you have any questions or comments, just let us know as always.

Regards,

SK Options Trading www.skoptionstrading.com

29 September 2010
OPTIONTRADER TRADING SIGNAL: BUY GLD Dec 2010 $131, $132 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) Long GLD Dec-10 $130 Calls @ $2.70 (5 Units allocated) Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) Long GLD Dec-10 $131 Calls @ $2.98 (5 Units allocated) Long GLD Dec-10 $132 Calls @ $2.68 (5 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. We hereby signal to buy GLD Dec-10 $131 Calls @ $2.98, with 5 Units allocated to this trade and to buy GLD Dec-10 $132 Calls @ $2.68, with 5 Units allocated to this trade. This forms part of our plan to switch funds to more leveraged out of the money GLD call options.

Regards,

SK Options Trading www.skoptionstrading.com

29 September 2010
OPTIONTRADER TRADING SIGNAL: SELL GLD Dec 2010 $120 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) Long GLD Dec-10 $130 Calls @ $2.70 (5 Units allocated) Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) This leaves 40 units, or 40% of our portfolio in cash. We hereby signal to sell our GLD Dec-10 $120 Calls @ $9.50, having purchased at @ $7.60 with 10 Units allocated to this trade. This gives us a profit off 25% on the trade. This is not a sign that we are any less bullish on gold, we would simply like to switch the funds to more leveraged out of the money call options since these calls are now in the money and so less leveraged to the gold price. We intend to purchase more out of the money GLD calls shortly. Regards,

SK Options Trading www.skoptionstrading.com

28 September 2010
OPTIONTRADER TRADING SIGNAL: BUY SLV JAN-11 $24 & $22 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) Long GLD Dec-10 $130 Calls @ $2.70 (5 Units allocated) Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) Long SLV Jan-11 $24 Calls @ $0.60 (5 Units allocated) Long SLV Jan-11 $22 Calls @ $1.10 (5 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. Following our earlier update, we hereby signal to buy SLV January 2011 $24 calls at $0.60 with 5 units allocated to this trade and also hereby signal to buy SLV January 2011 $22 calls at $1.10 with 5 units allocated to this trade Regards,

SK Options Trading www.skoptionstrading.com

27 September 2010
OPTIONTRADER UPDATE: Silver Breakout Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) Long GLD Dec-10 $130 Calls @ $2.70 (5 Units allocated) Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) This leaves 40 units, or 40% of our portfolio in cash. We now believe that despite being technically overbought, silver has experienced a technical breakout and could go on a run from here. Therefore we intend to purchase some out of the money January 2011 SLV calls in an attempt to profit from this run. We also continue to look to add to our gold positions, especially on weakness. If you have any questions or comments on the above, just let us know. Regards,

SK Options Trading www.skoptionstrading.com

22 September 2010
OPTIONTRADER UPDATE: Silver Just Needs One Last Push Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) Long GLD Dec-10 $130 Calls @ $2.70 (5 Units allocated) Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) This leaves 40 units, or 40% of our portfolio in cash. Silver is currently stuck up against resistance at $21.00, as it attempts to top its previous high of $21.44. A push through this level will send silver soaring, however until it breaks this level we are reluctant to take any long position on silver. When it does however, we intend to buy out of the money SLV calls, with both December 2010 and January 2011 expiration dates. Gold is also looking to take out some psychological resistance at $1300. We still looking to buy more out of the money calls on GLD, as we think gold as a lot further to run. The catalyst for further rallies in the precious metals will most likely be further USD devaluation caused by expectations that the Fed will embark on another round of quantitative easing. Looking to the US dollar index, it is very close to major support at 80. Although we believe it is a question of when, not if, the USD breaks down through 80, there is still a fair chance that it could initially bounce or at least be held up by the support. It is possible that the USD breakdown could be coupled with silver going through $21.44, which would be an explosively bullish combination. If you have any questions or comments on the above just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

18 September 2010
OPTIONTRADER TRADING SIGNAL: BUY GLD December 2010 $133 Calls, January 2011 $131 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) Long GLD Dec-10 $130 Calls @ $2.70 (5 Units allocated) Long GLD Dec-10 $133 Calls @ $2.08 (5 Units allocated) Long GLD Jan-11 $131 Calls @ $3.55 (5 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. We hereby signal to BUY GLD December 2010 $133 Calls at $2.08 with 5 units allocated to this trade. We hereby signal to BUY GLD January 2011 $131 Calls at $3.55 with 5 units allocated to this trade. This is part of our previously detailed strategy to move into more leveraged call options on GLD. As normal, if you have any questions or comments, just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

17 September 2010
OPTIONTRADER UPDATE: Gold Breaks $1280, Silver Looks To Break $21 Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) Long GLD Dec-10 $130 Calls @ $2.70 (5 Units allocated) This leaves 40 units, or 40% of our portfolio in cash. Gold is breaking through $1280 and silver through $21. We intend to continue buying leveraged call options on GLD as previously detailed. We intend to buy out of the money calls on SLV when silver breaks its previous high at $20.44. We will not be buyers before silver breaks this level as silver is currently overbought and there is a chance it may not break through the resistance at $20.44. With respect to our credit spread position "Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80", we are going to let both these options expire worthless. This will give us a 12% return on capital for this trade. If you are holding this position there is no need to cover the short side or sell the long side, this will simply incur unnecessary commission costs. If you have any questions or comments on the above, just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

17 September 2010
OPTIONTRADER TRADING SIGNAL: BUY GLD December 2010 $130 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) Long GLD Dec-10 $130 Calls @ $2.70 (5 Units allocated) This leaves 40 units, or 40% of our portfolio in cash. We hereby signal to BUY GLD December 2010 $130 Calls at $2.70 with 5 units allocated to this trade. This is part of our strategy to move into more leveraged call options on GLD and SLV. As usual, if you have any questions or comments, just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

16 September 2010
OPTIONTRADER TRADING SIGNAL: BUY GLD Jan 2011 $130 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) Long GLD Jan-11 $130 Calls @ $3.70 (5 Units allocated) This leaves 45 units, or 45% of our portfolio in cash We hereby signal to BUY GLD January 2011 $130 Calls at $3.70 with 5 units allocated to this trade. This is part of our strategy to move into more leveraged call options on GLD and SLV. As usual, if you have any questions or comments, just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

15 September 2010
OPTIONTRADER UPDATE: Gold Is Going Places Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) This leaves 50 units, or 50% of our portfolio in cash We think that gold has made a major breakout, and now $1300 is almost a given before the end of the year, with that milestone more likely to be reached in the next month or so. This is being spurred by a feeling that QE2 could be just around the corner, and we think more quantitative easing measures could even be announced at the next Fed meeting. It would be healthy to see some consolidation at these levels before moving on upwards, but we cannot say for sure if this will happen. We have received numerous emails from new subscribers regarding options trading on gold stocks and why we have not bought call options on gold stocks to take advantage of rising gold prices. As longer term readers will know, we are not recommending investing in gold stocks as a way to play the bull market in gold. Although there is certainly money to be made in this sector, gold shares have underperformed in recent years and have not offered sufficient leverage to the gold price in our opinion. In fact, over the past year Kinross Gold Corp (a major gold producer and component of the HUI index) has performed similarly to DGZ, the Deutsche Bank Short Gold ETN. So if you wanted exposure to rising gold prices, why would you invest in a stock that performed like a short gold ETN? We certainly do not see the reason to buy the stocks, or buy any call options on gold stocks. This is the primarily reason we stay away from gold stocks and focus on trading options on GLD and SLV in order to maximize our profits and effectively gain leverage to rising gold prices. We are recommending out of the money GLD calls to best take advantage of the major rally that is unfolding in gold. We intend to use our cash on the sidelines to start buying these out of the money calls, beginning when markets open today and for the rest of this week. We will be targeting January 2011 GLD calls with strikes of around $130. If you have any questions or comments on the above, just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

15 September 2010
OPTIONTRADER TRADING SIGNAL: SELL Jan-11 GLD $110 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) This leaves 50 units, or 50% of our portfolio in cash We hereby signal to sell our GLD Jan-11 $110 Calls @ $15.30. Having purchased them for $14.40 this gives us a 6.25% gain on the trade. This is part of our strategy to move into more leveraged call options on GLD and SLV. As usual, if you have any questions or comments, just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

15 September 2010
OPTIONTRADER TRADING SIGNAL: SELL Jan-11 SLV $20 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) This leaves 40 units, or 40% of our portfolio in cash We hereby signal to sell our Jan-11 SLV $20 Calls @ $1.46. Having purchased them for $1.35 this gives us a 8.15% gain on the trade. This is part of our strategy to move into more leveraged call options on GLD and SLV. As usual, if you have any questions or comments, just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

15 September 2010
OPTIONTRADER TRADING SIGNAL: SELL Jan-11 SLV $20 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) This leaves 40 units, or 40% of our portfolio in cash We hereby signal to sell our Jan-11 SLV $20 Calls @ $1.46. Having purchased them for $1.35 this gives us a 8.15% gain on the trade. This is part of our strategy to move into more leveraged call options on GLD and SLV. As usual, if you have any questions or comments, just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

13 September 2010
OPTIONTRADER UPDATE: One Last Stop Before $1300 Gold Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) This leaves 30 units, or 30% of our portfolio in cash As previously stated, our strategy for the coming weeks is to move into more leveraged call options on GLD, closing out our positions on the in the money call options and buying calls that are more out of the money, with strikes around $130. We will be looking to pick up GLD calls on any weakness this week, as we think that any drop in prices will be the last stop before gold breaks its all time high of $1265 and heads to $1300. To the downside we see support at $1210. Silver is in a similar situation, and so we will also be looking to purchase out of the money SLV calls as we anticipate silver will break $21 and go on a run from there. We expect the catalyst for this rally in precious metals to be new quantitative easing measures, or the market anticipating more quantitative easing, both in the US and possibly Europe too. Also further sovereign debt issues, especially in the Eurozone will bring money into gold as investors look for a safe haven.

If you have any questions or comments, just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

8 September 2010
OPTIONTRADER UPDATE: Our Strategy For Gold Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) This leaves 30 units, or 30% of our portfolio in cash Our strategy for the coming weeks is to move into more leveraged call options on GLD, closing out our positions on the in the money call options and buying calls that are more out of the money, with strikes around $130. We will be looking to close our positions in the GLD $110 January 2011 calls soon, since they are just about showing a profit. We will then look to close out our positions in the Jan-11 $115 calls, Dec-10 $120 calls and even the SLV Jan-11 $20 calls as our trades begin to show profit. Upon closing these positions, we will use the funds to buy out of the money call options on GLD and perhaps SLV too. When our credit spread position "Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80" expires at the end of next week, this will free up additional funds to invest in GLD calls. Also that credit spread position looks set to expire with a healthy 12% profit in just a couple of months.

If you have any questions or comments, just let us know.

Regards,

SK Options Trading www.skoptionstrading.com

2 September 2010
OPTIONTRADER TRADING SIGNAL: BUY GLD Jan 2011 $115 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) Long GLD Jan-11 $115 Calls @ $10.00 (5 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. We hereby give the signal to BUY more GLD January 2010 $115 calls at $10.00 with 5 units allocated to this trade. Regards,

SK Options Trading www.skoptionstrading.com

1 September 2010
OPTIONTRADER TRADING SIGNAL: BUY GLD Dec 2010 $125 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $4.00 (5 Units allocated) This leaves 35 units, or 35% of our portfolio in cash. We hereby give the signal to BUY more GLD Dec 2010 $125 calls at $4.00 with 5 units allocated to this trade. Regards,

SK Options Trading www.skoptionstrading.com

31 August 2010
OPTIONTRADER UPDATE: Buying More GLD Calls This Week Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long Sep-10 $110 Puts @ $0.68/Short Sep-10 $111 Puts @ $0.80 (10 Units allocated) This leaves 40 units, or 40% of our portfolio in cash. Since we are of the opinion that gold is on the brink of a major rally to a new all time high, and given that we are currently 40% cash in our options trading portfolio, we are going to start buying more GLD calls this week. Ideally we will be looking to buy on weakness, but if gold does not show any weakness we will still be buyers. Options we intend to buy include GLD December calls at $120 and $125, as well as GLD January 2011 calls at $115. We may also look to purchase more SLV $20 January 2011 calls. Essentially we are looking to double our current position in the these options, by gradually layering in over the next week or so. If you have any questions or comments on the above, just let us know. Regards,

SK Options Trading www.skoptionstrading.com

26 August 2010
OPTIONTRADER UPDATE: Comex Gold Options Expiration Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) BUY Sep-10 $110 Puts @ $0.68/SELL Sep-10 $111 Puts @ $0.80 (10 Units allocated) This leaves 40 units, or 40% of our portfolio in cash.

The gold options on Comex expire today, so although gold is showing great strength, we could see prices take a temporary hit in today's trading. If such a drop occurs, we will be looking to buy more out of the money December 2010 and January 2011 GLD calls. This will probably include buying more of the $115 Jan-11 calls and the Dec-10 $120 and $125 calls. If silver gets sold off too, we would also be looking to buy more Jan-11 $20 SLV call options. As always if you have any questions or comments on the above just let us know. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

26 August 2010
OPTIONTRADER TRADING SIGNAL: Sell GLD Jan-11 $105 Calls @ $17.45 Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) BUY Sep-10 $110 Puts @ $0.68/SELL Sep-10 $111 Puts @ $0.80 (10 Units allocated) This leaves 40 units, or 40% of our portfolio in cash. We hereby signal to close the position in GLD Jan-11 $105 Calls which we purchased for $17.05 (10 Units allocated) by selling these calls for $17.45, giving us a 2.34% profit on the trade. This does not mean we are any less bullish on gold, we simply intend to invest this capital in options that have more leverage to the gold price. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

22 August 2010
OPTIONTRADER UPDATE: Beware of Options Expiration This Week Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) BUY Sep-10 $110 Puts @ $0.68/SELL Sep-10 $111 Puts @ $0.80 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. With gold options on Comex set to expire this week on the 26th, we are wary of a drop in gold prices prior to this expiration, as in recent years there has been a pattern of drops in the gold price just before expiration. We will be looking to purchase more GLD calls on any weakness in gold this week and continue to look to close out our position in the GLD Jan-11 $105 Calls on any strength in favor of more leveraged out of the money call options. We believe that this could be one of the last opportunities to pick up long positions in gold at a discount, before prices embark on a major rally for the rest of the year. If you have any questions or comments, please just let us know. Regards, The OPTIONTRADER Team www.skoptionstrading.com

19 August 2010
OPTIONTRADER UPDATE: Ichimoku Clouds Bullish On Gold Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) BUY Sep-10 $110 Puts @ $0.68/SELL Sep-10 $111 Puts @ $0.80 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. More technical analysis is coming in bullish on gold prices, with the Ichimoku Clouds now giving very positive signals on the yellow metal. For those unfamiliar with this school of technical analysis, follow this link for more information: http://stockcharts.com/help/doku.php?id=chart_school:technical_indicators:ichimoku_clou d We have attached a chart of gold's Ichimoku Cloud, to show how gold is currently displaying three of the four main bullish signals that this form of technical analysis can give. Firstly the gold price has now moved about the cloud, which signals that we are in an uptrend. Secondly the price has moved above the standard line (red) which indicates a positive momentum behind the gold price. Thirdly the blue turning line has moved above the standard line, another indication of bullish momentum in gold. The fourth bullish signal is the cloud turning from red to green, signifying a change in the ebb-flow within the trend, with green being positive and red being negative. Although the cloud ahead is currently red, it looks like it will be turning green in the coming weeks to give the final bullish signal. This concurs with our forecasts for a major rally in the coming months, and we will be looking to increase our position in GLD calls over the next two weeks, on any weakness in the gold price. Such weakness could come with options expiration next week. We are also looking to close out our position in GLD Jan-11 $105 Calls in favour of higher delta call options, ie call options with more leverage to the gold price. If you have any questions or comments on the above just let us know. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

16 August 2010
OPTIONTRADER UPDATE: Gold Breaks Above $1220 Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) BUY Sep-10 $110 Puts @ $0.68/SELL Sep-10 $111 Puts @ $0.80 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. Gold prices have shot up sharply in London, currently trading at $1222/ounce. If gold closes above $1220 we will take this as a very positive technical signal. We may look to close out our position in the GLD Jan-11 $105 Calls in favor of more leverage out of the money call options if gold prices continue to show strength over the next few days. If you have any questions or comments, please just let us know. Regards, The OPTIONTRADER Team www.skoptionstrading.com

15 August 2010
OPTIONTRADER UPDATE: Gold and the US Dollar Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) BUY Sep-10 $110 Puts @ $0.68/SELL Sep-10 $111 Puts @ $0.80 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. You may wish to read our latest article: http://www.skoptionstrading.com/updates/2010/8/15/us-dollarto-fade-as-gold-heads-higher.html for our current outlook on the market. If you have any questions on the above, just let us know. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

12 August 2010
OPTIONTRADER UPDATE: USD Strengthening, Gold To Fall? Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) BUY Sep-10 $110 Puts @ $0.68/SELL Sep-10 $111 Puts @ $0.80 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. As detailed in our most recent article, we expected a bounce in the US Dollar: http://www.skoptionstrading.com/updates/2010/8/9/gold-prepares-to-make-yet-another-all-timehigh.html In the two days since that article, the USD index has gained about 2.3%, rising to 82.35. Although the USD strength has dampened the rising gold price, we have yet to see gold prices fall enough to justify purchasing further long positions. However gold tends to fall fast and hard when it corrects, rather than a gradual descent, so we could see a sharp drop in gold this week as the US dollar continues to rise. We will be looking to act quickly if/when this happens to buy more out of the money GLD call options. If you have any questions on the above, or queries regarding our trading strategy, just let us know.

Regards,

If you have any questions or comments, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

9 August 2010
OPTIONTRADER UPDATE: Our Outlook On Gold Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) BUY Sep-10 $110 Puts @ $0.68/SELL Sep-10 $111 Puts @ $0.80 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. Our latest article outlines our current outlook on gold, you can find it here: http://www.skoptionstrading.com/updates/2010/8/9/gold-prepares-to-make-yet-another-all-timehigh.html If you have any questions or comments, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

5 August 2010
OPTIONTRADER TRADING SIGNAL: Credit Spread GLD Sep-10 $110/$111 Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) BUY Sep-10 $110 Puts @ $0.68/SELL Sep-10 $111 Puts @ $0.80 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. Further to our earlier update, we have opened the following credit spread trade on GLD with 10 units allocated: BUY Sep-10 $110 Puts @ $0.68 SELL Sep-10 $111 Puts @ $0.80 Potential Profit = 12% If you have any questions or comments on the above, just let us know. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

4 August 2010
OPTIONTRADER UPDATE: Aug & Sep Credit Spreads on GLD Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) This leaves 40 units, or 40% of our portfolio in cash. Having postponed these credit spread trades for a week or so due to a drop in gold, and the fact that we didn't see serious support until $1140 for the yellow metal, we have now decided to proceed as planned. We intend to take credit spreads on GLD September and August contracts with strikes below $110 over the rest of this week, for example buying $108 GLD Sep-10 puts and selling $109 GLD Sep-10 puts. We expect both contracts to expire worthless. If you have any questions on the above, or wish to have more explanation of our trading strategy, please feel free to let us know. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

28 July 2010
OPTIONTRADER UPDATE: Gold Trades On Hold Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) This leaves 40 units, or 40% of our portfolio in cash.

Our gold credit spread trading ideas are on hold for now due to the very recent drop in gold prices (currently at $1168). We will let this drop work itself out before entering into any further trades. We see support for gold around its 200 day moving average and at $1140. We still firmly believe that gold will make a new high this year.

If you have any questions, please let us know. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

27 July 2010
OPTIONTRADER UPDATE: Credit Spreads on GLD Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) This leaves 40 units, or 40% of our portfolio in cash. We are the opinion that gold is well supported at current levels and has limited downside. We do not think the major rally in gold prices will come for another month or so, therefore we intend to implement multiple credit spread trades in order to profit from this lull. For those unfamiliar with credit spreads, here is a definition: An options strategy where a high premium option is sold and a low premium option is bought on the same underlying security. An example would be buying a Jan 50 call on ABC for $2, and writing a Jan 45 call on ABC for $5. The net amount received (credit) is $3. The investor will profit if the spread narrows. We intend to take credit spreads on GLD September and August contracts with strikes below $110 over the rest of this week, for example buying $108 GLD Sep-10 puts and selling $109 GLD Sep-10 puts. We expect both contracts to expire worthless. If you have any questions on the above, or wish to have more explanation of our trading strategy, please feel free to let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

27 July 2010
OPTIONTRADER TRADING SIGNAL: SELL GLD SEP-10 $110 Puts, SPY DEC-10 $100 Puts Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long SPY Dec-10 $100 Puts @ $7.15 (10 Units allocated) Closed @ $3.78 Long GLD Sep-10 $110 Puts @ $1.62 (10 Units allocated) Closed @ $1.20 This leaves 40 units, or 40% of our portfolio in cash. Further to our advanced notice, we have sold our GLD Sep-10 $110 Puts at $1.20 and sold our SPY Dec-10 $100 Puts @ $3.78 Regards,

The OPTIONTRADER Team www.skoptionstrading.com

26 July 2010
OPTIONTRADER UPDATE: Closing Out SPY and GLD Puts Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long SPY Dec-10 $100 Puts @ $7.15 (10 Units allocated) Long GLD Sep-10 $110 Puts @ $1.62 (10 Units allocated) This leaves 20 units, or 20% of our portfolio in cash. Our S&P 500 short via puts on SPY has not worked out as planned, and so we intend to cut our losses and close the position in trading today. We are also looking to close our GLD puts, since gold is holding up and we do not see the risk of a severe drop to be large enough to warrant this position as a hedge anymore. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

22 July 2010
OPTIONTRADER UPDATE: Our Current Outlook for Gold, S&P and USD Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long SPY Dec-10 $100 Puts @ $7.15 (10 Units allocated) Long GLD Sep-10 $110 Puts @ $1.62 (10 Units allocated) This leaves 20 units, or 20% of our portfolio in cash. The simple charts attached may increase your understanding of our comments made in this update. Gold appears to be holding up fairly well, despite apparently having broke our support at $1185. The fact that gold has only closed below $1185 once during this pullback may be a sign that the support at $1185 has not been truly broken. However the fact that gold has closed below $1185, and has traded as low as $1177 has convinced us that the risk of a retreat back to $1150 is sufficient enough to warrant purchasing the GLD $110 Sep-10 Puts in order to hedge our long positions. We view this protective put similar to an insurance policy, as so we are quite happy to make a loss on the put since it meant that our options portfolio was hedged against the potential downside in gold for the next month or so. Looking further out than the next month see have no doubt that gold will make another all time high this year. Hence why we continue to hold our GLD calls despite them being in negative territory at present. We are looking to the rally to start in about six weeks from now, perhaps less, as we leave the weakness of the summer doldrums behind. However until then we do not see our positions going to far, especially when one considers that a lot of selling in calls during yesterdays trading. This could mean that there a number of "trapped longs" ie there are speculative trades on out of the money futures and options, but they will be running out of patience so expect any strength in gold to be met with selling by these traders. This adds further weight to our argument that any major rally in gold will not be underway for a good few weeks. One of the charts attached is of the S&P 500 and where we view the resistance to be, with a downtrend resistance line and the 50 day moving average both converging at around 1090. We will close our position in SPY Dec-10 $100 Puts if the S&P posts a close above those resistance levels. The USD index bounced nicely on our 82 support and is now making a climb from oversold conditions. We think the high for the year has been made for the USD, although it has support at 80 with the 200dma being at this level, and 80 being a historical support. Nothing further to add but we will watch closely due to the US Dollars close relationship with gold.

If you have any questions or comments, feel free to let us know.

Regards, The OPTIONTRADER Team www.skoptionstrading.com

20 July 2010
OPTIONTRADER TRADING SIGNAL: Buy GLD Sep-10 $110 Puts @ $1.62

Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long SPY Dec-10 $100 Puts @ $7.15 (10 Units allocated) Long GLD Sep-10 $110 Puts @ $1.62 (10 Units allocated) This leaves 20 units, or 20% of our portfolio in cash. Since gold has broken its support at $1185, we are hereby executing our plan to hedge our GLD calls by purchasing GLD Sep-10 $110 Puts at $1.62 with 10 units allocated to this trade. If you have any questions, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

17 July 2010
OPTIONTRADER UPDATE: Gold Still Holds $1185, S&P Drops After Hitting Resistance Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long SPY Dec-10 $100 Puts @ $7.15 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. Just a quick note regarding how the markets closed this week: Although we never like to see our trades down, we can take comfort in the fact that gold has held its support at $1185. This is the second time gold has tested this level, so the fact that the yellow metal has managed to hold it is a positive sign. Looking to the S&P 500, we mentioned in updates earlier this weak that we saw resistance around the 1100 level, with the 50 day moving average and a downtrend line both converging to form significant resistance just under 1100. The 31.60 point drop in the S&P500 on Friday goes a long way to vindicating our opinion regarding the 1100 resistance, however although this is a good start we still need to see further declines to boost our position in the $100 SPY December Puts, which are currently in the red. As always if you have any questions or comments, please just let us know. Regards.

The OPTIONTRADER Team www.skoptionstrading.com

14 July 2010
OPTIONTRADER UPDATE: Exiting GLD Calls, Buying More SPY Puts Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long SPY Dec-10 $100 Puts @ $7.15 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. This is just to give notice that we could close out our long GLD Jan-11 $105 Calls @ $17.05 position when markets open if gold prices rally slightly during the trading session. As previously detailed, this does mean we are any less bullish on gold, we simply wish to switch the funds to a more leveraged call option. We are also considering doubling our position in SPY Dec-10 $100 Puts, as we believe the S&P 500 is approaching resistance at around 1100, with the 50 day moving average line at 1095, and also a trend line connecting the two recent highs at 1131 at 1213 coming in at just below 1100. However this will be covered in more detail should we decide to proceed with the trade. If you have any questions or comments on the above, feel free to ask.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

12 July 2010
OPTIONTRADER UPDATE: Gold Holding Support Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long SPY Dec-10 $100 Puts @ $7.15 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. We were pleased to see gold holding our support at $1185 last week, and we are looking for it to continue to trade above this level this week too. If gold should break below its support at $1185 we may move to purchase a near term protective put on GLD to hedge our heavy exposure to longer term GLD calls. If gold should stage a decent rally this week, we may look to exit some of our positions in GLD calls. This is not because we are any less bullish on gold, but simply because we have held these contracts for some time now, so there has been considerable decay of the time premium built into the prices we purchased at, and many are now in the money so we would then be looking to switch the funds to options with higher strike prices and therefore greater leverage to the gold price. Looking to the S&P 500, we see an upside of perhaps 25 points and will look to increase our short position if the index reaches 1100. As always if you have any questions or comments just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

7 July 2010
OPTIONTRADER UPDATE: SPY Puts Will Wait For Another Day Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long SPY Dec-10 $100 Puts @ $7.15 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash.

We are going to leave buying more SPY puts for another day, hopefully when the market has found some strength and we can buy the puts at a lower price. If you have any questions, just let us know! Regards, The OPTIONTRADER Team www.skoptionstrading.com

6 July 2010
OPTIONTRADER UPDATE: More SPY Puts Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long SPY Dec-10 $100 Puts @ $7.15 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. Having bought an initial short position on the S&P 500 with our SPY Dec-10 $100 Puts @ $7.15, we are on the lookout to extend our short position, and we may do so in trading today. We are currently looking to purchase the SPY Dec-2010 $90.00 Puts, however this depends on market conditions, we will not look to purchase until the end of the trading day - if we do so at all. To see what we are thinking with respect to the US stock markets, you may wish to read our latest article: http://www.skoptionstrading.com/updates/2010/7/5/us-stocks-down-down-deeper-anddown.html If you have any questions or comments, please just let us know!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

3 July 2010
OPTIONTRADER UPDATE: Gold Takes A Hit As US Stocks Dive Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long SPY Dec-10 $100 Puts @ $7.15 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. So gold took a fairly decent hit on Thursday's trading, however we are not overly concerned as the yellow metal ticked back up on Friday to finish up at around $1211, with our support level at $1185 remaining intact. It was a bit of a shame in terms of timing as we have only just recent purchased the GLD Dec-10 $125 Calls @ $6.70, however in the coming months we believe this trade will turn out to be a very profitable one. Our signal to purchase puts on the S&P has got off to a good start, and we may look to increase our short position next week, potentially with Dow puts, or more specifically puts on the Dow ETF, DIA. If you have any questions or comments, please just let us know!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

1 July 2010
OPTIONTRADER TRADING SIGNAL: Buy SPY Dec-2010 $100 Puts Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) Long SPY Dec-10 $100 Puts @ $7.15 (10 Units allocated) This leaves 30 units, or 30% of our portfolio in cash. Further to our advanced warning some hours ago, we have just purchased SPY Dec-2010 $100 Puts at $7.15 with 10 units allocated to this trade. If you have any questions or comments, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

30 June 2010
Upcoming OPTIONTRADER Signal: Buy SPY Puts Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) This leaves 40 units, or 40% of our portfolio in cash. We now think that the Head and Shoulders formations on the S&P and Dow indices is now complete, and therefore we intend to go short on US equities, beginning with purchasing SPY December 2010 $100.00 Put contracts. SPY is an ETF for the S&P 500 Index, so this is essential a bet that the S&P will decline, with the $100 SPY strike price equivalent to 1000 on the S&P Index. If you have any questions on the above, just let us know. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

25 June 2010
OPTIONTRADER TRADING SIGNAL: BUY GLD Dec-2010 $125 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) Long GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) This leaves 40 units, or 40% of our portfolio in cash.

We hereby signal a BUY on GLD Dec-10 $125 Calls @ $6.70 (10 Units allocated) as discussed in our email earlier today.

If you have any questions, please just let us know. Regards, The OPTIONTRADER Team www.skoptionstrading.com

24 June 2010
Upcoming OPTIONTRADER Signal: Buying GLD Calls As Gold Breaks Out Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash. We have previously stated that we intended to increase our exposure to gold soon via more calls on GLD, the gold ETF. It looks as though we will be doing just that in this coming trading session, and possible later this week as well, depending on market conditions. With Comex gold options expiring today we hope the gold price will enjoy a bit more freedom going forward, and this will allow it to break up and out of the ascending triangle formation we have described in previous updates - one more close above $1250 will further confirm out thoughts that the gold price is going to go on a run in the short term. As for the specific contracts we may signal to buy, our next favourite purchase would be the December 2010 $125 GLD Calls, however we may also look to December $130 or September $125 if there appears to be insufficient liquidity in the December $125 calls, or if we feel the spread is too large. We will not be buying on the open, but will wait a few hours to ensure gold does not drop sharply and no severe technical damage is done, since sharp drops can often occur when the Comex opens.

If you have any questions or comments on the above, just let us know!

Regards, The OPTIONTRADER Team www.skoptionstrading.com

19 June 2010
OPTIONTRADER UPDATE: Gold Breaks Out To All Time High Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash. Just yesterday we pointed out the formation of an ascending triangle formation in gold, a bullish formation that we felt would lead the yellow metal to new all time highs. Today's trading saw gold do just that. Whilst ideally we would like one more close above $1250 to seal the deal, the breakout is pretty much confirmed and we think gold will go on a run from here. We make look to increase our gold exposure next week, depending how markets open. If you have any questions, please let us know.

Regards, The OPTIONTRADER Team www.skoptionstrading.com

17 June 2010
OPTIONTRADER UPDATE: Gold Forms Ascending Triangle Formation Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash Another positive signal for gold in recent weeks is the formation of an ascending triangle formation. We have attached a very simple chart to illustrate our point. For those unfamiliar with the technical implications of an ascending triangle formation, it is a bullish formation that usually forms during an uptrend as a continuation pattern indicating accumulation. Therefore ascending triangles tend to break up and out, so we are looking for gold to break above $1250 and begin a run to new all time highs in less than a month. We will watch, wait and hold our current gold positions for the rest of this week. However next week we may even look to extend our gold position further. If you have any questions about any of the above please just let us know!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

9 June 2010
OPTIONTRADER UPDATE: Gold Surging Higher, Dow Short On Hold Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash Gold surged higher yesterday before coming back a tad, however we now think that a real surge in gold prices is imminent, and one that should seriously take out the resistance at $1250. With regard to a possible short on the US stock markets, we are just watching and waiting for now to see if the index will form a head and shoulders pattern, or if it will continue with its fall. We are also patiently waiting for a prime time to perhaps short US bonds, via calls on TBT. To answer some questions we are getting regarding the US dollar, yes we would consider a short position on the currency, but not until the USD index gets to around 92. Please remember that it takes time for opportunities to appear and sometimes if we are not totally sure about a trade we will let it pass us by. This does not ensure that we will capitalise on every available opportunity in the market, but it does ensure that we do everything we can to make our trades winners and to decrease the risk of a losing trade as much as possible.

If you have any questions or comments, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

7 June 2010
OPTIONTRADER UPDATE: Possible US Stock Market Short Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash

Given the close below 10,000 on the DOW last Friday, an area we view as a key technical support, we may look to take a short position this week by purchasing puts on the S&P and/or Dow Jones Index. We are waiting to see how the markets open in America before finalising our decision, but if we do go ahead it will likely be with put contracts a few months out on SPY and/or DIA, the associated index ETF's. We have nothing further to add with respect to gold other than it is still looks great we are comfortable with our positions. Same goes for silver.

If you have any questions on the above or wish to have further explanation, please just let us know. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

29 May 2010
OPTIONTRADER TRADING SIGNAL: BUY SLV JAN-11 $20 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) Long SLV Jan-11 $20 Calls @ $1.35 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash This is give notice that we have just bought Jan-2011 $20 Calls on SLV at $1.35 with a suggested allocation of 10 units for this trade. If you have any questions, please just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

28 May 2010
Upcoming OPTIONTRADER Signal: Buying SLV $20 Jan-11 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) This leaves 60 units, or 60% of our portfolio in cash This is give advance warning that we intend to purchase Jan-11 SLV $20 Calls when US markets open, subject to suitable market conditions, and we will suggest an allocation of 10 units for this trade. If you have any questions regarding this trade, please just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

27 May 2010
OPTIONTRADER UPDATE: Gold & Other Potential Trades Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) This leaves 60 units, or 60% of our portfolio in cash. We are very happy with recent trade in gold and content with our current gold positions However with 60% of our portfolio in cash we are on the look out for other potential trades. Two trades are at the top of our list, one being an intermediate term trade on silver with a bullish outlook and another longer term trade on US bond prices with a bearish outlook. The trade we are considering on silver would potentially be in the January 2011 calls on SLV with $20 strike prices. The trade we are considering on US bonds would potentially be in calls on the ETF TBT which is a leveraged inverse treasury ETF. This would be a long term position with a relatively small allocation since we would not want too much our trading capital tied up in one trade. We may take action on these trades this week, dependent on market conditions, however we will give advanced notice closer the time if we decide on making a trade.

If you have any questions or comments just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

25 May 2010
OPTIONTRADER UPDATE: Gold Looking Good Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) This leaves 60 units, or 60% of our portfolio in cash. We are pleased to see gold prices recovering slightly after the sell off last week. Gold climbed to $1195 today, which is good, however we would like to see a close above the psychological $1200 mark before we can be more confident that another assault on $1250 is immanent. That said, we still firmly believe that it is a question of when, not if, gold makes another all time high and we are comfortable with our current positions. If you have any questions or comments, do let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

22 May 2010
OPTIONTRADER TRADING SIGNAL: Stop Triggered on GLD Jan-11 $110 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) This leaves 40 units, or 40% of our portfolio in cash. Our long position in GLD Jan-11 $110 Calls which we bought for $10.80, and subsequently placed a stop on at $12.50, has been stopped out since the market opened below our stop and so the position has just been closed at a price of $12.21. Although we turned a profit of 13% on this trade, this is lower than we had hoped for and we are disappointed to see that gold could not hold the support level of $1185. We will watch the market action closely today before deciding whether to make any trades next week. We still remain bullish on gold and our comfortable with out current positions. If you have any questions or comments, please just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

20 May 2010
OPTIONTRADER TRADING SIGNAL: BUY GLD DEC-10 $120 Calls Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) STOP SELL CLOSE @ $12.50 Long GLD Dec-10 $120 Calls @ $7.60 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash. Correction from previous update should have read: "It would be a shame if this position was stopped out today as we expected a larger return from it, and we see support for gold at $1185." This is a notice to say that we have just bought a position in GLD Dec-10 $120 Calls @ $7.60, and we are signalling a buy with 10 units allocated to this trade. This trade is being done in response to gold falling close to $1185, which we see as a support level.

If you have any other questions or comments just ask.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

20 May 2010
OPTIONTRADER UPDATE: Gold Dropping Back Again Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) STOP SELL CLOSE @ $12.50 This leaves 60 units, or 60% of our portfolio in cash. Firstly since the GLD Jan-11 $110 Calls last traded at $12.84, we are very close to seeing our stop being hit on the calls we bought at $10.80. It would be a shame is this position was stopped out today as we expected a larger return from it, and we see support for gold at $1185. Secondly, since we see support at $1185 we may signal to buy some more calls before the close, probably the GLD $120 Dec-10 Calls.

If you have any questions or comments, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

17 May 2010
OPTIONTRADER UPDATE: Gold drifting back Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) STOP SELL CLOSE @ $12.50 This leaves 60 units, or 60% of our portfolio in cash. Gold prices appear to be drifting back slightly in London, so this is just a short note to point out that our stop order detailed above may be triggered if the decline continues into US trading hours. We do not see this decline in gold as too much of a threat at present, and prices could even fall to $1185 in the short term and we would still be bullish. If you have any questions, just ask.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

12 May 2010
OPTIONTRADER UPDATE: Gold Makes An All Time High Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) STOP SELL CLOSE @ $12.50 This leaves 60 units, or 60% of our portfolio in cash. Recently Closed Trades: Bought GLD JAN-11 $120 CALLS @ $8.00 on the 23/12/09 Sold for $8.80 on 10/5/10. 10% Profit in 108 days. Sold GLD MAY-10 $105 PUTS @ $0.09 on the 7/5/2010 Bought back for $0.05 on the 11/5/2010 44.44% in 4 days. Looking at the two trades above, they are as different as they come. The first involved a straight forward purchase of GLD calls to benefit from rising gold prices in the medium term, limiting risk and locking in profits (with a stop at $8.80) as soon as positive territory was reached. The second was short term, aiming to take advantage of flat or rising gold prices, taking on a potentially large amount of risk. Although the second trade looks to be leagues better than the first, in our view although although the second trade is better, it is not that much better since it involved taking on a large amount of risk, and so we were rightfully compensated for that risk, whereas the first one involved less risk and so delivered a lower return. Despite being stopped out earlier than anticipated on the $120 GLD Calls, we are happy with how we played that trade and we will continue to effectively manage our risk by using stop orders to lock in profits, even if that means that occasionally we have to accept a less impressive return. However 10% in 108 days is still a return of over 33% per year without compounding. So where next for gold? Our best guess here is simply that gold is going higher. As with the break above $1033 and run to $1225 in late 2009 we are again in uncharted territory, so it is difficult is foresee resistance levels and apply technical analysis to state a target price. However since we think gold prices are still heading higher, we will hold on to our calls and move stops up to lock in profits as gold prices continue to make more gains. We will stay long gold so long as gold prices keep going up, when they drop back our stops will be triggered and we will bank our profits. We will not be taking any more long positions on gold as of yet, or any other markets in fact, we are happy with what we have at present and cannot see any clear cut opportunities for now.

If you have any questions or comments, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

12 May 2010
OPTIONTRADER TRADING SIGNAL: Buy to Close GLD $105 May-10 Puts Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) STOP SELL CLOSE @ $12.50 Short GLD May-10 $105 Puts @ $0.09 (10 Units allocated) Closed @ $0.05 This leaves 60 units, or 60% of our portfolio in cash. Having short sold the contracts at $0.09, we have just bought the GLD $105 May-10 Puts at $0.05 to close the trade. We had hoped to get a better price but in light of the low volume and increased volatility premiums we decided we will take the $0.05 as per our orginal plan. Our apologies for still including the Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) in our open posistions in our previous email, our stop order was triggered and they sold yesterday for $8.80. A more detailed update will follow after the market close.

If you have any questions or comments, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

12 May 2010
OPTIONTRADER UPDATE: GLD Puts Set To Close Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) STOP SELL CLOSE @ $8.80 Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) STOP SELL CLOSE @ $12.50 Short GLD May-10 $105 Puts @ $0.09 (10 Units allocated) NO LIMIT, STOP @ $1.00 This leaves 40 units, or 60% of our portfolio in cash (minus adjustments on a daily basis to cover the naked short position on puts In view of the fact that the GLD Puts we shorted at 9 cents closed at 6 cents yesterday, and gold prices have rallied some $20 since then, we are removing the 5 cent limit order on the GLD puts and intend to simply close the position and buy back the contracts when markets open (as the price should be below 5 cents). We will of course let you know when we close the trade and at what price.

If you have any questions or comments, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

10 May 2010
OPTIONTRADER UPDATE: Stop loss order on GLD Puts Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) STOP SELL CLOSE @ $8.80 Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) STOP SELL CLOSE @ $12.50 Short GLD May-10 $105 Puts @ $0.09 (10 Units allocated) LIMIT BUY CLOSE ORDER @ $0.05, STOP @ $1.00 This leaves 40 units, or 60% of our portfolio in cash (minus adjustments on a daily basis to cover the naked short position on puts We are just putting in a stop loss order on our short GLD $105 put position, to somewhat limit our risk and potential losses. Please note that stops on options are not usually guaranteed. This is more of a token stop loss, to protect against the armageddon scenarios, than a stop we actually foresee being triggers.

If you have any questions or comments, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

8 May 2010
OPTIONTRADER UPDATE: Great End To The Week Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) STOP SELL CLOSE @ $8.80 Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) STOP SELL CLOSE @ $12.50 Short GLD May-10 $105 Puts @ $0.09 (10 Units allocated) LIMIT BUY CLOSE ORDER @ $0.05 This leaves 40 units, or 60% of our portfolio in cash (minus adjustments on a daily basis to cover the naked short position on puts) The close for gold significantly over $1200 caps off a great week for our positions, and we are locking in more profits with our new stop on GLD Jan-11 $120 Calls at $8.80. Next week will be the big test to see if gold can break above $1225 and make a new all time high, if it does we think it will run up sharply from there. If you have any questions, please feel free to ask them!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

8 May 2010
Upcoming OPTIONTRADER Signal: Short Selling GLD May-10 Puts Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash. We hereby give the signal to SELL OPEN GLD MAY-10 PUTS @ $0.09 with 10 Units allocated to this trade. We are also inserting a limit order, to buy back the puts, at $0.05. IMPORTANT: This is a high risk, short term trade and suitable for experienced options traders only. If you are unsure of any of the associated risks or have any questions - please ask us.

If you have any questions or comments, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

7 May 2010
Upcoming OPTIONTRADER Signal: Short Selling GLD May-10 Puts Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash. This is to give notice that we are looking at short selling some GLD puts in May-10 series with strikes of $105, subject to market conditions. The trading plan being to sell the puts then to repurchase them back at a lower price, as the probability that they will expire worthless increases closer to expiration. The allocation to this trade will be 10 units. IMPORTANT: This is a high risk, short term trade and suitable for experienced options traders only. If you are unsure of any of the associated risks or have any questions - please ask us. For more information on this type of trade, please see: http://www.skoptionstrading.com/updates/2010/4/26/gold-options-enhanced-leverage-managedrisk.html

If you have any questions or comments, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

7 May 2010
OPTIONTRADER UPDATE: Gold Hits $1200 Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) STOP @ $12.50 This leaves 50 units, or 50% of our portfolio in cash. As we have been predicting for some time, gold has rallied again to over $1200, in defiance of the US dollar gains as the situation in Europe continues to deteriorate. With Spain and Portugal now coming back into the frame alongside Greece, the situation is going from bad to worse and depending on the final result of the UK election, we may have to look how to fit "UK" into the PIIGS acronym. Our proposed trade of selling GLD puts would have worked wonderfully, but the market moved before we did. However we are still looking at short selling some GLD puts as we still think its a good trade. Looking at our current positions, please note the insertion of a $12.50 stop order on the GLD Jan11 $110 Calls we bought at $10.80. If you have any questions or comments, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

7 May 2010
Upcoming OPTIONTRADER Signal: Selling GLD Puts Current Positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash. This is to give notice that we are looking at short selling some GLD puts later this week, looking at the May-10 and June-10 series with strikes of $110 and $105. The trading plan being to sell the puts then to repurchase them back at a lower price, as the probability that they will expire worthless increases closer to expiration. IMPORTANT: This is a high risk trade and suitable for experienced options traders only. For more information on this type of trade, please see: http://www.skoptionstrading.com/updates/2010/4/26/gold-options-enhanced-leverage-managedrisk.html

If you have any questions or comments, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

6 May 2010
OPTIONTRADER UPDATE: Gold Shows Resilience

Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash. Today the USD index gained roughly 1%. It has climbed more than two points in three days. Silver is down. Oil prices are down. However gold is holding fast. If the yellow metal can hold out the week, that will be a sign of incredible strength. Defying the US dollar strength has the benefit of not only leaving our GLD calls unscathed, but more importantly if gold prices can hold whilst the USD gains, they will surely surge with any weakness in the greenback. Given that the USD index appears to be overbought, this surge could be coming very soon.

As always, any questions or comments, just let us know!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

1 May 2010
OPTIONTRADER UPDATE: Gold Strategy Going Forward Current open positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash. Having had a great week, it looks to us as though gold will challenge its all time highs before long, so we would just like to roughly outline our exit strategy for the GLD calls we are holding at the moment. We intend to play this rally in gold in a similar manner to the way in which we played the initial run up to $1225, simply by moving up stop orders behind the price, locking in profits as gold went up but still maintaining exposure to benefit from further price rises. So as gold progresses further and our calls move in profit, we will be issuing stop orders, probably keeping between 10%-20% behind the price of each contract. Some new subscribers have asked whether they should buy our current open positions. Whilst strictly speaking our only buy and sell signals come when we issue them, since the calls are trading now at lower prices then we purchased at, it appears to be a rational move to buy the calls if you agree with our hypothesis of higher gold prices. However, this is at your own discretion.

As always, any questions or comments, just let us know!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

24 April 2010
OPTIONTRADER UPDATE: Gold Surges Higher

Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash.

Gold surged higher today, moving above $1170 despite a USD rally, which is a very positive move and will be even more so if it can hold this level for the week. We have had quite a few enquirers from subscribers today with a variety of questions, so we are going to attempt to cover them with some explanation of whats been happening. Many have asked what the catalyst will be regarding our predicted run for gold to a new high. Well the important thing here is that gold is gaining whilst the dollar is gaining, when the dollar starts to slide (as it hits resistance around 82-83 on the USD) we expect to see gold really start to move upwards towards making a new all time high. On the down side, if more debt issue arise from the other PIIGS, this could cause further drops in the Euro and ignite a dollar rally which would exert significant downwards pressure on gold. However given that gold is breaking up through resistances and showing significant strength, we expect the next move is higher, not lower. Recent news that Venezuela may nationalize its gold mines has sparked a couple of questions, but keep in mind that Venezuela only makes up roughly 1% of global mine output, so any disruption in supply shouldn't have that large of an affect on gold prices, and any side effect of a disruption will be positive for gold as it is a decrease in supply. However the issue for investors here is what happens to gold mining and exploration companies in the country. Investors in Venezuelan gold stocks, or multinational mining companies with projects in Venezuela may be hit, this is a risk that mining investors take and why we prefer using options and vehicles more directly related to gold as they do not have these associated wildcard risks. With regard to the Russia central bank buying gold of course this is positive for gold prices, but remember that as well as Russia buying gold, many people appear to have forgotten that India bought 200 tons from the IMF in late 2009. This is 200 tons that will not come back on the market, a positive sign for the gold supply/demand dynamics. The fact that the IMF is selling its gold and then turning round and giving aid to Greece - just to prevent Greece experiencing the overdue hangover of its reckless behavior - is an absurd move. There is a growing trend of some smart central banks such as India, Russia (and probably China too) buying significant amounts of gold, and then there are countries such as England, who sold their reserves back when gold was around $275 an ounce. In short the central bank buyers of gold are doing well, the sellers are not, and this trend will continue. The reason the Greek debt issues didn't give gold a massive boost is because gold is largely priced in US dollars. The Greek debt issues weakened the Euro and thereby strengthen the US Dollar as a biproduct, dampening any gains gold could and perhaps should have made. However this is only when you look at gold in USD, gold in Euros is making new all time highs, and is significantly higher than it was trading when gold was $1225. This confirms that gold is still a safe haven asset, as there has been trouble in Europe and Euros have moved to gold.

We hope this answers the questions that may of you asked, and questions some of you may have had but hadn't asked yet. As always, any questions or comments, just let us know!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

23 April 2010
OPTIONTRADER UPDATE: Patience is Key Current positions are listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash. When the Dow hit the 11,000 mark we intended to take a short position, however we noticed that Wall Street futures opened sharply up at around 11050, breaking right through our 11000 resistance line so we decided against taking a short position. This appears to have been a good decision, since the Dow went on to rally another 100 points and any put contracts we would've bought, would be significantly underwater by now. Looking to gold we are not worried by the sideways action too much, since the yellow metal has made a higher low and a higher high recently, and we think the stage is set for another run at $1200. So patience not the short the Dow may have saved us some losses, and we believe patience with our gold position will deliver some decent gains. We are avidly searching for trading opportunities in this fairly quite market, but patience is key to profitable trading. If you have any questions or comments on the above, please just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

12 April 2010
OPTIONTRADER UPDATE: Dow Short - On Hold For Now Current positions are listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash. The Dow hit the 11,000 mark last week, and we intended to take a short position. However Wall Street futures have opened sharply up at around 11050, so we are just keeping our powder dry for now and are going to watch in order to ensure we do not get caught in another surge of this bear market rally. If you have any questions or comments on the above, please just let us know.

Regards, The OPTIONTRADER Team www.skoptionstrading.com

10 April 2010
OPTIONTRADER UPDATE: Dow Short - Maybe Next Week Current positions are listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash. The Dow hit the 11,000 mark in today's trading just minutes before the close, so we had little time to place a trade and even less time to make an effective, useful signal to our subscribers - since there would not have been time for subscribers to act on a signal given the minuscule window of opportunity before the close. We will now have to wait until next week, where we will take a look at the DOW again and determine whether it is worth a short. With respect to gold, today's trading was very positive and we are very pleased to see the yellow metal over $1160, there is now little between here and $1200. If you have any questions or comments on the above, please just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

8 April 2010
OPTIONTRADER UPDATE: Reverse H&S On Gold, Patience Needed For Dow Short Current positions are listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash. Gold's rally in recent trading, up to over $1150, should be taken as a very positive signal for those long the yellow metal, us included. If gold can break the $1150 resistance range, then we see no real technical obstacle stopping gold surging to $1200, therefore we are holding our gold positions as is. One should also note the apparent reverse head and shoulders formation on gold, which makes for a very solid technical base on which gold can rally to new highs. The Dow is teetering just below the 11,000 mark at which we will look to take a short position. We will be patient and if the Dow does not reach 11,000 before correcting, then we will have to let this one pass us by. We are also considering puts on the S&P 500 as well.

If you have any questions or comments on the above, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

2 April 2010
OPTIONTRADER Update: 44 Points Away From A Dow Short Current positions are listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash. The Dow reached 10956 in Fridays trading, a mere 44 points from the 11000 level at which we intend to take a short position. Keeping in mind that 44 points can be done easily in a day, it is probable that 11000 will be reached next week and we will take our short position. We are well aware that not all subscribers have access to index puts with their broker, and therefore will not be able to put puts directly on the index. Therefore we will be recommending our options trade based on DIA, the Dow Jones ETF, so that all subscribers can use it. However if you wish to trade the equivalent options directly on the index, then feel free to do so. We are currently looking at puts about 6 months out, with strikes around 10500/$105.00.

If you have any questions or comments, as always let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

26 March 2010
OPTIONTRADER UPDATE: Gold Prices Holding, Dow Looking Prime To Short Current positions are listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, or 50% of our portfolio in cash.

After the Portuguese downgrade yesterday and the subsequent Euro drop, dollar jump and fall in gold prices, we are glad to see gold coming back slightly today. However we are keeping a close watch to ensure that the uptrend remains intact and our gold positions are not jeopardized. Having seen the market rally impressively today, and indeed over the past year, we feel the time is nearing where we would like to get short on the broader US markets. This will probably be done via DOW and/or S&P Puts, and we are currently looking at options 6 months to a 1 year out, with strike prices that are close to being in the money. We continue to believe that this rally in the stock market is unsustainable and we see DOW 11000 as a point we would like to get short at. If you have any questions or comments on the above, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

23 March 2010
OPTIONTRADER UPDATE: Stop on SLV Calls may be triggered

Current positions are listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) Long SLV Jan-11 $16 Calls @ $1.81 (10 Units allocated) SOLD @ $2.18 This leaves 50 units, or 50% of our portfolio in crash. Our $2.18 stop on our SLV calls has been triggered, therefore we have sold the position for a profit of 20.44%.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

22 March 2010
OPTIONTRADER UPDATE: Stop on SLV Calls may be triggered

Current positions are listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) Long SLV Jan-11 $16 Calls @ $1.81 (10 Units allocated) STOP @ $2.18 This leaves 40 units, or 40% of our portfolio in crash. This notice is just to give advance warning that our $2.18 stop on our SLV calls may be triggered this coming trading session. If this happens we will still exit the position with a decent profit.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

10 March 2010
OPTIONTRADER: Gold Still Looking Good Current positions are listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) Long SLV Jan-11 $16 Calls @ $1.81 (10 Units allocated) STOP @ $2.18 This leaves 40 units (40% of our options trading portfolio) in cash. Gold is currently trading at $1125, and we believe the technical picture for gold and silver at present is very healthy indeed. One should note that the gold chart now shows higher highs and higher lows, which indicates to us that a new uptrend is underway. The next technical resistance level is around $1150, after that the road is clear to $1200, so hold onto those positions for what should be a very positive next couple of months. As our positions move into profit we will be moving stops up behind the price to lock in profits, as we did on the previous run up to $1200 and as we have done on our SLV calls. New subscribers who have not bought these positions may do so at their own discretion, since some are trading at lower prices than we purchased at, some at higher.

If you have any questions or comments, just let us know!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

3 March 2010
OPTIONTRADER: Gold Breakout, New Stop on SLV Calls Current positions are listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) Long SLV Jan-11 $16 Calls @ $1.81 (10 Units allocated) NEW STOP @ $2.18 This leaves 40 units (40% of our options trading portfolio) in cash. Gold closing above $1125 is a very positive sign for our positions. We are very happy with our above positions and think they will do very well over the next few month as gold prices embark on a rally back to $1200. Since our SLV Jan-11 $16 Calls that we bought at $1.81 are now trading at $2.50, they are up 38% so we are putting in a stop at $2.18, to lock in a 20% profit on the trade. Any questions or comments, just ask! Regards,

The OPTIONTRADER Team www.skoptionstrading.com

25 February 2010
OPTIONTRADER: Gold & USD Update

Current positions are listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) Long SLV Jan-11 $16 Calls @ $1.81 (10 Units allocated) This leaves 40 units, 40% of our portfolio in cash. Today's trading aside, gold moving up with the dollar is a sign of tremendous strength in gold, investors are not only buying gold as a US dollar hedge but as a safe haven asset too, and the buying for this reason is so heavy it is outweighing the selling from USD strength. The bad news from the PIIGS in Europe has weakened the euro, so the dollar has strengthened as a byproduct of this, rather than on its own merits. The biggest possible risk for gold at present is a strong, sustained rally in the US dollar, driven by multiple hikes in the Federal Funds Rate. Even though gold prices have been moving up with gold over the last month, if the USD continues rallying, this will eventually flow through to have a negative impact on gold. There is also a risk from further trouble in Europe driving the USD higher as traders try to pick the lesser of two evils. The biggest possible advantage for gold is that currently all the focus is on Europe's troubles, we have a USD rally, and yet gold is still trading at around $1100. Soon the focus will switch back to the problems that the US faces, some of which dwarf those in Europe in our opinion, and we will see the US dollar go into sharp decline. So if gold can make gains, or even just tread water whilst the US dollar rallies, it will soar if the greenback were to begin to drop. We feel that gold has now made its low for the year, and once we see a couple of closes above $1125, this will signal to us that a rally back to $1200 is imminent. We expect gold to make a new all time high in the first half of this year. If you have any questions or comments on the above, please let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

17 February 2010
OPTIONTRADER: Gold Breakout Current positions are listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) Long SLV Jan-11 $16 Calls @ $1.81 (10 Units allocated) This leaves 40 units (40% of our options trading portfolio) in cash. Gold has now broken out of a declining wedge formation, something which we view as a very positive sign. We are very happy with our above positions and think they will do very well over the next month as gold prices embark on a decent rally. Any questions or comments, just ask! Regards,

The OPTIONTRADER Team www.skoptionstrading.com

14 February 2010
OPTIONTRADER: Market Outlook Current positions are listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) Long SLV Jan-11 $16 Calls @ $1.81 (10 Units allocated) This leaves 40 units (40% of our options trading portfolio) in cash. We were pleased to see the positive action in gold at the end of last week, especially as gold managed to gain when the USD was strengthening too. We also have noted that gold has formed a bullish declining wedge formation, which it could break up out of this week, which would probably spark the rally back to $1200 we have been waiting for. A move to $1125 would confirm a breakout. It looks like this week should be an interesting one so we will keep the updates coming when we see significant moves in the markets. As always, any questions, just drop us a line!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

9 February 2010
OPTIONTRADER: Market Update Gold's support level at $1050 appeared to hold today, which we are viewing as a very positive move and we are comfortable with our current positions, listed below: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) Long SLV Jan-11 $16 Calls @ $1.81 (10 Units allocated) This leaves 40 units (40% of our options trading portfolio) in cash. We see support for gold at $1050-$1033, but if it retreats as far as $1000 we will have to reevaluate our positions and trading strategy. For the meanwhile however we are happy to be patient, and since our options do not expire until January 2011, we are not exposed to the pressure of the rapid time premium decay that is found in near term options. Since the USD Index is now overbought in our opinion, with the RSI over 70, we are considering purchasing puts on the USD index. We are also looking at oil, which has dipped below its 200 day moving average for the first time in over 6 months, and could be becoming a buy. However this will be covered later if we decide to pursue that route. The Euro is now very oversold, so a bounce back in the Euro could help the USD weaken, therefore increasing the gold price in dollar terms. We are looking for this to happen in the coming weeks. As always if you have any questions or comments on the above, just let us know. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

6 February 2010
OPTIONTRADER: Market Update We are not longer going to pursue a position in Randgold calls, the stock is moving up and we are going to refrain from chasing it today. It is however comforting the see gold bouncing around the $1050 level and showing some strength.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

6 February 2010
Upcoming OPTIONTRADER Signal on Randgold Resources Ltd. As a reminder, our current positions: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) Long SLV Jan-11 $16 Calls @ $1.81 (10 Units allocated) Gold has dropped off to $1050, our next support level. We intend to purchase more gold calls next week, but today we believe the better opportunity is in in Randgold Resources Ltd (NASDAQ:GOLD). Randgold is a very strong gold stock in our opinion and therefore we view its recent drop below its 200 day moving average and subsequent fall in the Relative Strength Index to below 30, as signs this stock is ripe for a trade. We are looking at purchasing a position in the JUN-10 $70.00 Calls (GUDFN) and may do so later today.

Any questions, please just ask.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

5 February 2010
OPTIONTRADER TRADING SIGNAL: BUY SLV JAN-11 $16.00 Calls

As per our advance notice, we have just purchased the following position: SLV JAN-11 $16 Calls for $1.81 - 10 Units allocated

(Trades under the symbol XUX Jan 22 '11 $16 Call)

Any questions on the above, as always just ask

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

5 February 2010
Upcoming OPTIONTRADER Signal: Buying SLV Calls This is to give notice that we intend to purchase SLV Jan-11 $16.00 Calls before the market closes today, with 10 units allocated to this trade. These contracts last traded at $1.87. Any questions, please just ask.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

5 February
OPTIONTRADER: US Dollar Rises Near 80, Gold Breaks $1075

As a reminder our current open positions are as follows: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, 50% of our options trading portfolio in cash. We believe that the recent run in the USD has run out of steam, with the USD Relative Strength Index being overbought and strong resistance for the USD Index at 80, so since todays trading saw the USD rise as high as 79.965 we think the end of this USD bear market rally is imminent. Gold had made a descending triangle formation which it has now broken down from, since it broke through support at $1075 The absolute bottom for gold we see at $1033, with some some more support at $1050. If it reaches that level we will be loading up and dedicating 90% of our options trading portfolio to GLD calls. We are also still looking at silver with the view to perhaps picking up some SLV calls, specially since today its RSI broke down below 30 - we will provide more detail nearer the time if we decide it is worth a trade.

Otherwise if you have any questions or comments, as always don't hesitate to ask!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

2 February 2010
OPTIONTRADER: An Update on Gold & USD

As a reminder our current open positions are as follows: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $14.40 (10 Units allocated) Long GLD Jan-11 $105 Calls @ $17.05 (10 Units allocated) Long GLD Jan-11 $120 Calls @ $8.00 (10 Units allocated) Long GLD Jan-11 $110 Calls @ $10.80 (10 Units allocated) This leaves 50 units, 50% of our options trading portfolio in cash. We believe that the recent run in the USD has run out of steam, with the USD Relative Strength Index being overbought and strong resistance for the USD Index at 80. Therefore we highly doubt that gold will go further than $1075. Gold appears to have made a descending triangle formation which we think it will break up out of shortly. The absolute bottom for gold we see at $1033, if it reaches that level we will be loading up on near dated calls and dedicating 90% of our options trading portfolio to GLD calls. However we feel it is more likely that $1075 is as low as gold will go for now. We are also taking a look at silver with the view to perhaps picking up some SLV calls, we will provide more detail nearer the time if we decide it is worth a trade.

Otherwise if you have any questions or comments, as always don't hesitate to ask!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

22 January 2010
OPTIONTRADER TRADING SIGNAL: BUY GLD JAN-11 $110 Calls

As per our advanced notice, we have just purchased the following position: GLD JAN-11 $110 Calls for $10.80 - 10 Units allocated

Any questions on the above, as always just ask

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

21 January 2010
Upcoming OPTIONTRADER Signal: Buying GLD Calls

Gold prices are currently around $1110 and the relative strength index has dropped to 45.87. Since the RSI is now below 50, we are considering adding to our gold long positions tomorrow if the price weakness continues. We will probably be buying more GLD Calls in the Jan-11 series at either $110 or $105, with 10 units allocated to the trade.

If you have any questions, just let us know!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

8 January 2010
OPTIONTRADER Market Update

Gold appears to be stabilizing with support being found just above $1075. We are confident that gold will make a significant new all time high in 2010, probably in the next few months, so we are holding our all our long positions, which are listed below. Long GLD Jan-11 $115 Calls at $14.00 (10 Units) Long GLD Jan-11 $110 Calls at $14.40 (10 Units) Long GLD Jan-11 $105 Calls at $17.05 (10 Units) Long GLD Jan-11 $120 Calls at $8.00 (10 Units) We will look to add to our gold positions on any further weakness. As for the equities market since the DOW broke up through our resistance at 10500 we will not consider shorting the index until it is around the 11000 mark, which we see as the next resistance level and ultimately a more attractive level to acquire a short position at.

As always, if you have any questions please just let us know and we will do our best to answer them as soon as possible.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

23 December 2009
OPTIONTRADER TRADING SIGNAL: BUY GLD JAN-11 $120 Calls

As per our advanced notice, we have just purchased the following position: GLD JAN-11 $120 Calls (OQAAP) for $8.00 - 10 Units allocated

Any questions on the above, as always just ask

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

22 December 2009
Upcoming OPTIONTRADER Signal: Buying GLD $120 Jan-11 Calls

As a reminder, our current open positions are as follows: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units) No Stop Long GLD Jan-11 $105 Calls @ $17.05 (10 Units) No Stop Long GLD Jan-11 $110 Calls @ $14.40 (10 Units) No Stop

Since the USD Index closed with its RSI at 71.34 we are now of the opinion that it is technically overbought and so with accordance with our trading plan, we intend to pick up another long gold poistion and signal a BUY on the GLD Jan-11 $120 Calls when the market opens, with 10 units allocated to this trade. We would add to our gold long positions again should the gold price and its relative strength index fall much further. Any questions or comments, please just let us know!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

18 December 2009
OPTIONTRADER: Market Update

The following is a brief update concerning the recent market action. As a reminder, our current open positions are as follows: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units) No Stop Long GLD Jan-11 $105 Calls @ $17.05 (10 Units) No Stop Long GLD Jan-11 $110 Calls @ $14.40 (10 Units) No Stop We are still looking to purchase further gold positions, however the USD index has clearly broken out of its down channel and has rallied sharply higher. The good news, as we see it, is that the Relative Strength Index for the USD is now over 69, so it is on the verge of being overbought. Therefore we see the future upside in this USD bear market reaction rally as limited at best. We will look to purchase more gold long positions if/when the RSI rises above 70 for the USD. Similarly with gold, its RSI closed at 39.52 and so we are confident that this correction is nearly over. We are looking to purchase more calls on weakness and if the RSI should drop to 30 or below we intend to allocate up to 90% of our options trading portfolio to calls on gold/GLD. The calls we are looking at will be dated Jan-11 or later.

As always if you have any questions or comments on the above, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

10 December 2009
OPTIONTRADER TRADING SIGNAL: BUY GLD Calls

As per our advanced notice, we have just purchased the following position: GLD JAN-11 $105 Calls (OQAAA) for $17.05 - 10 Units allocated

Any questions on the above, as always just ask

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

10 December 2009
OPTIONTRADER TRADING SIGNAL: BUY GLD Calls

As per our advanced notice, we have just purchased the following position: GLD JAN-11 $110 Calls (OQAAF) for $14.40 - 10 Units allocated We intend to purchase the following shortly: GLD JAN-11 $105 Calls (OQAAA) for - 10 Units allocated

Any questions on the above, as always just ask

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

9 December 2009
Upcoming OPTIONTRADER Signal: Buying GLD Calls

Gold prices are currently around $1130 and we see gold getting support at $1125, a level which it has bounced on twice in the last 24 hours. Looking to our technicals, gold's Relative Strength Index closed at 46.18. During major rallies, the RSI rarely dips much below 50, so we are viewing this as an opportunity to pick up some GLD call options. We currently have just one open position, Long GLD Jan-11 $115 Calls @ $14.00 (10 units allocated) however if the conditions are suitable when New York opens we plan to purchase GLD Jan-11 $110 Calls (10 Units Allocated) and GLD Jan-11 $105 Calls (10 Units Allocated).

Any questions or comments, please just let us know!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

7 December 2009
OPTIONTRADER: Trading Strategy Update

The following is a brief update on our trading strategy. As a reminder, our current open positions are as follows: Long GLD Jan-11 $115 Calls @ $14.00 (10 Units) No Stop We are looking to purchase further gold positions, however despite our bullishness on the metal we are watching the USD index for a breakout of its downchannel. Although we view the possibility of a USD rally to be highly unlikely, it is still a possibility and therefore we will not be purchasing any more long positions on gold until we see confirmation that the USD is indeed going to stay in its down channel. As we have mentioned before, we are keeping a close watch on the equities market, as we have long felt they were overbought. We see resistance for the DOW at around 10500, and again at 11000, so we may also look to begin to build a short position on the DOW soon. To us, the phrase "jobless recovery" is an oxymoron and to put it simply, a jobless recovery, isn't.

As always if you have any questions or comments on the above, just let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

5 December 2009
OPTIONTRADER TRADING SIGNAL: Sell GLD Calls

The following stops have been triggered and therefore we have closed the positions listed below: GLD Jan-11 $105 Calls bought at $12.00, OQAAA (5 Units) - Stopped out at $18.00, for a 50% gain. GLD Jan-11 $105 Calls bought at $10.80, OQAAA (5 Units) - Stopped out at $18.00, for a 66.66% gain GLD Jan-11 $110 Calls bought at $10.60, OQAAF (5 Units) - Stopped out at $15.90, for a 50% gain.

We will cover the action in gold with an update shortly.

Any questions on the above, as always just ask

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

5 December 2009
OPTIONTRADER TRADING SIGNAL: Sell SLV Jan-11 $18 Calls (XUXAT) Our stop at $2.30 has just been triggered so therefore we have closed the position as follows: Sold SLV Jan-11 $20 Calls (XUXAT) at $2.30 We bought 5 Units worth at $1.70, therefore we made a 35.29% profit on this trade.

Any questions on the above, as always just ask

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

2 December 2009
OPTIONTRADER: Locking in more Profits on GLD and SLV Calls With gold trading at over $1200 today, we have decided to lock in further gains, but also keep exposure to further gains in both gold and silver, by revising our stops on all positions held. GLD Jan-11 $105 Calls bought at $12.00, OQAAA (5 Units) - Stop placed at $15.60 - New Stop is at $18.00 GLD Jan-11 $105 Calls bought at $10.80, OQAAA (5 Units) - Stop placed at $15.60 - New Stop is at $18.00 GLD Jan-11 $110 Calls bought at $10.60, OQAAF (5 Units) - Stop placed at $13.80 - New Stop is at $15.90 SLV Jan-11 $20 Calls bought at $1.70, XUXAT (5 Units) - Stop placed at $2.20 - New Stop is at $2.30 GLD Jan-11 $115 Calls bought at $14.00, OQAAK (10 Units) - New Stop is at $10.00

Remember stop orders are not usually guaranteed on options, therefore the price we get if the stop is triggered may differ slightly from those stated above, as it could for you too.

If you have any questions, please let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

26 November 2009
OPTIONTRADER TRADING SIGNAL: BUY GLD JAN-11 $115 Calls (OQAAK)

As per our advanced notice, we have just purchased the following position: GLD JAN-11 $115 Calls (OQAAK) for $14.00 - 10 Units allocated

Any questions on the above, as always just ask

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

26 November 2009
Upcoming OPTIONTRADER Signal: Buying GLD JAN-11 $115 Calls

Gold prices are currently around $1180 and so still remain technically overbought. However on our technical charts for the US dollar the greenback has just broken down through a key support to make an intraday low of 74.433 roughly half an hour ago. We think losing this support will cause the US dollar to fall further in the short term therefore we intend to buy GLD JAN-11 $115 Calls when the markets open on the US to benefit from this drop in the USD. The allocation for this trade will be 10 Units.

Any questions, just let us know!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

25 November 2009
OPTIONTRADER: Locking in Profits on GLD and SLV Calls In order to lock in our gains, but also have exposure to further upside in both gold and silver, we are installing stops on all our open positions as follows: GLD Jan-11 $105 Calls bought at $12.00 (5 Units) - Stop placed at $15.60 GLD Jan-11 $105 Calls bought at $10.80 (5 Units) - Stop placed at $15.60 GLD Jan-11 $110 Calls bought at $10.60 (5 Units) - Stop placed at $13.80 SLV Jan-11 $20 Calls bought at $1.70 (5 Units) - Stop placed at $2.20

Remember stop orders are not usually guaranteed on options, therefore the price we get if the stop is triggered may differ slightly from those stated above, as it could for you too.

If you have any questions, please let us know.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

24 November 2009
OPTIONTRADER TRADING SIGNAL: Sell SLV Jan-11 $18 Calls (XUXAR)

As per our advanced notice, we have just closed the following position: Sold SLV Jan-11 $18 Calls (XUXAR) at $3.40 We bought 5 Units worth at $2.20, therefore we made a 54.55% profit on this trade.

Any questions on the above, as always just ask

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

23 November 2009
OPTIONTRADER: Trading Strategy Update

The following is a brief update on our trading strategy.

As a reminder, our current open positions are as follows: Long GLD Jan-11 $105 Calls @ $12.00 (5 Units) Long GLD Jan-11 $105 Calls @ $10.80 (5 Units) Long GLD Jan-11 $110 Calls @ $10.60 (5 Units) Long SLV Jan-11 $20 Calls @ $1.70 (5 Units) Long SLV Jan-11 $18 Calls @ $2.20 (5 Units) We are cautious about buying further gold positions, despite our bullishness on the metal, due to its technical situation at the moment. Gold is overbought and we do not like to buy when the Relative Strength Index is above 70 (at Friday's close it stood at 76.37). Also the USD is sitting on a significant support at around 75 on its index, so we would like to see it break that before picking up more long positions on gold and possibly silver. So until we either see a lower RSI in gold or the USD breaking down through its support we will probably hold off buying more long positions on gold. When trading opens in New York, if silver hasn't fallen significantly, we intend to close our $18 SLV calls as they have done well and are now in the money so we would like to bank the profits. We are also keeping an eye on the equities market, as we have long felt they were overbought. We may pick up a small short position if the DOW rises to 10500, but we will cover that in detail at a later stage.

As always if you have any questions or comments on the above, please just let us know!

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

19 November 2009
OPTIONTRADER TRADING SIGNAL: Sell GLD Jan-11 $100 Calls (OQAAV)

We have just closed the following positions:

GLD JAN-11 $100.00 CALLS (OQAAV) - Sold entire position (10 Units) at $20.05 - 5 Units purchased at $14.00 (43.21% Profit) - 5 Units purchased at $12.70 (57.87% Profit)

We are still very bullish on gold and intend to add to our long positions shortly when we see weakness in the gold price. However we are locking in this profits in the short term.

Any questions on the above, as always just ask

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

18 November 2009
Upcoming OPTIONTRADER Signal: Sale of GLD JAN-11 Calls

Gold prices are currently around $1146, and so our calls our showing substantial profits. If gold is at this level when trading begins in a few hours in New York, we will be looking to be closing some positions in order to lock in profits. We are still bullish on gold and will add to our long positions on any weakness in its price in the future.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

10 November 2009
OPTIONTRADER TRADING SIGNAL: Sell GLD Mar-10 $110 Calls (GCZCF) We have just closed the following positions: GLD MAR-10 $110.00 CALLS (GCZCF) - Sold at $5.30 - 5 Units purchased at $4.20 (26.19% Profit)

Any questions on the above, as always just ask

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

9 November 2009
Upcoming OPTIONTRADER Signal: Sale of GLD MAR-10 $110 Call

Gold prices are currently around $1105, and so our Mar-10 $110 GLD Calls is now in the money. If gold is at this level when trading begins in a few hours in New York, we will be looking to close this trade. The calls are now in the money and we would like to take the profits before time premium decay really begins to accelerate as the expiration date nears.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

5 November 2009
OPTIONTRADER TRADING SIGNAL: Sell GLD Jan-11 $90, Mar-10 $100 Calls

We have just closed the following positions: GLD MAR-10 $100.00 CALLS (GLDCV) - Sold at $10.25 - 5 Units purchased at $7.60 (34.87% Profit) - 5 Units Purchased at $7.80 (31.41% Profit)

GLD JAN-11 $90.00 CALL (OQAAL) - Sold at $22.35 - 2 Units - having purchased at $16.10 (32.82% Profit)

We are still overwhelmingly bullish on gold and intend to add to our long positions shortly. We just felt it was time to take the profits on these contracts and switch the funds to other calls on gold, which we will be doing soon.

Any questions on the above, as always just ask

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

29 October 2009
OPTIONTRADER TRADING SIGNAL: Buy GLD & SLV Calls

Gold is currently at $1033.40, silver at $16.30

We have just bought the following options and are signalling BUYS on these GLD and SLV calls:

SLV JAN-11 $18 @ $2.20 - 5 Units Allocated SLV JAN-11 $20 @ $1.70 - 5 Units Allocated GLD JAN-11 $105 @ $10.80 - 5 Units Allocated GLD JAN-11 $100 @ $12.70 - 5 Units Allocated

We view the current market weakness in gold as a good opportunity to add to our long positions, plus acquire a long positions on silver, which we are also bullish on. As always, any questions, please ask. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

28 October 2009
Upcoming OPTIONTRADER Signal: Gold Near Support

Gold prices are currently around $1034, very close to the key level of $1033 which was a resistance and now is a support level for gold. If gold is at this level when trading begins in a few hours in New York, we will look to add more GLD calls to our portfolio as this could be a good buying opportunity.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

7 October 2009
OPTIONTRADER TRADING SIGNAL: Sell GLD DEC-09 $100 CALL Having purchased 2 units worth of GLD DEC-09 $100 calls at $5.00, we have now just sold them for $5.70, banking a 12% gain in just less that a month.

We were hoping for a larger gain on these contracts, but have decided to settle for a more modest profit in order to focus on longer dated options and reduce the adverse effects of time premium decay (which will begin to accelerate rapidly as the December expiration date draws nearer).

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

7 October 2009
We greatly apologize, there was a small typo in the previous email stating "JAN-11 $100 @ $10.60 - 5 Units Allocated" instead of "JAN-11 $110 @ $10.60 - 5 Units Allocated".

The corrected version is below:

OPTIONTRADER TRADING SIGNAL: Buy GLD Calls

We have just bought the following options and are signalling BUYS on these GLD calls:

MAR-10 $100 @ $7.80 - 5 Units Allocated MAR-10 $110 @ $4.20 - 5 Units Allocated JAN-11 $100 @ $14.00 - 5 Units Allocated JAN-11 $105 @ $12.00 - 5 Units Allocated JAN-11 $110 @ $10.60 - 5 Units Allocated

We are looking to close the GLD Dec-09 $100 calls shortly, but are holding our other long positions in GLD Jan-11 $90 and GLD Mar-10 $100 Call positions.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

7 October 2009
Upcoming OPTIONTRADER Signal: Breakout in Gold

Gold prices have just broken up through the critical resistance at $1033, and we expect them to surge from here.

We intend to close out the our position in the GLD Dec-09 $100.00 Calls when New York opens.

We always intend to aggressively purchase longer dated calls on GLD when New York opens too.

Contracts we are looking at include: Jan-10 $100, Jan-10 $110, Mar-10 $110, Jan-11 $110, Jan-10 $100.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

6 October 2009
Upcoming OPTIONTRADER Signals: Long Gold

This is to give advance notice that we are planning to further build our long position on gold, as we believe the key level of $1033 will be broken shortly. Once this resistance is broken, we intend to becoming aggressively long on gold by purchasing calls on GLD, the gold ETF.

As always please feel free to ask any questions.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

12 September 2009
OPTIONTRADER TRADING SIGNAL:

Buy GLD DEC-09 $100.00 CALL

We have just bought at $5.00

Allocation is 2 units. This is part of our plan to build a large long position on gold over the next few weeks.

This particular trade has been prompted by gold rising over $1007, which we saw as a resistance level. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

9 September 2009
OPTIONTRADER TRADING SIGNAL:

Buy GLD MAR-10 $100.00 CALL

We have just bought at $7.60

Allocation is 2 units. This is part of our plan to build a large long position on gold over the next few weeks.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

4 September 2009
OPTIONTRADER TRADING SIGNAL:

Buy GLD JAN-11 $90.00 CALL (OQAAL)

We have just bought at $16.10

Allocation is 2 units. This is the beginning of our plan to build a large long position on gold over the next few weeks.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

3 September 2009
Upcoming OPTIONTRADER Signal: Long Gold

This is to give advance notice that we are planning to build a long position on gold, which we may start when markets open in a few hours. We intend to begin by purchasing long dated in the money calls, then move to purchasing more out of the money contracts with nearer expiration dates. The calls will be done on GLD, the gold ETF.

As always please feel free to ask any questions.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

1 September 2009
OPTIONTRADER TRADING SIGNAL: Sell USO Oct-09 $40.00 Put (USOVH) at $4.30 Allocation: 1 Unit. We have just sold our puts that we purchased for $4.30 for $4.80, since the technical picture for oil has not played out exactly how we thought it would. We still think USO could go to $33.00, but the probability of this happening has decreased in our view, therefore we are taking the profit of just over 11%.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

26 August 2009
Upcoming OPTIONTRADER Signal: Closing USO Trade

This is to give advance notice that we are planning to sell the put contracts we bought on USO in the next trading session if conditions permit. As always please feel free to ask any questions.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

18 August 2009
OPTIONTRADER TRADING SIGNAL:

SELL KINROSS GOLD CORP SEP-09 $20.00 PUT (KGCUD)

We had bought these contracts for at $1.10, but now that KGC is trading at $18.07 it has fallen as much as we had foreseen therefore we are closing this position, having just sold at $2.10. This means we have banked a profit of over 90% on this trade.

The allocation for this trade was 1 unit.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

18 August 2009
OPTIONTRADER TRADING SIGNAL:

SELL IAMGOLD CORP SEP-09 $12.50 PUT (IAGUV)

We had bought at $1.00 just last week, however the stock has fallen faster than we anticipated therefore we decided to take a healthy profit, selling at $1.50 just now - a 50% gain in just a few days.

The allocation for this trade was 1 unit.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

15 August 2009
OPTIONTRADER TRADING SIGNAL:

Buy IAMGOLD CORP SEP-09 $12.50 PUT (IAGUV)

We have bought at $1.00

Allocation is 1 unit.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

14 August 2009
Upcoming OPTIONTRADER Signal: Puts on IAMGOLD Corp (IAG)

This is to give advance notice that we are planning to purchase some put contracts on Iamgold Corp (IAG)

We feel the stock is overbought, ahead of its peers and in a technical situation that warrants taking a position in some put contracts.

We are currently looking at the $12.50 or $10.00 Sep-09 series, but our final decision will depend on market conditions.

This will be a small purchase with only 1 unit allocated to this trade, and a short time frame of less than 2 months.

As always please feel free to ask any questions.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

12 August 2009
Upcoming OPTIONTRADER Signal: Selling Puts on Kinross Gold (KGC)

This is to give advance notice that we are planning to sell our put contracts on Kinross Gold Corp (KGC) shortly, since they have got off to a great start and we are reaching a point where we would like to take our profits.

We just recently purchased Sep-09 $20.00 Puts at $1.10, and they last traded at $1.60, so we are sitting on a paper profit of roughly 45%. Depending on the market action in the next couple of trading sessions, we may sell our puts and bank a profit.

As always please feel free to ask any questions.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

8 August 2009
OPTIONTRADER TRADING SIGNAL:

Buy KINROSS GOLD CORP SEP-09 $20.00 PUT (KGCUD)

We have just bought at $1.10

Allocation is 1 unit.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

7 August 2009
Upcoming OPTIONTRADER Signal: Puts on Kinross Gold (KGC)

This is to give advance notice that we are planning to purchase some put contracts or possibly sell calls short on Kinross Gold Corp. (KGC)

We feel the stock is slightly overbought and in a technical situation that warrants taking a position in some put contracts, or possible shorting some calls, depending on liquidity.

We are currently looking at the $20.00 Nov-09 series, but our final decision will depend on market conditions tomorrow, especially with regard to liquidity in these contracts.

This will be a small purchase with only 1 unit allocated to this trade, and a short time frame of less than 2 months.

As always please feel free to ask any questions.

Regards,

The OPTIONTRADER Team www.skoptionstrading.com

7 August 2009
Buy USO Oct-09 $40.00 Put (USOVH) at $4.30 Allocation: 1 Unit. This is the beginning of our plan to build a short position on crude oil.

The OPTIONTRADER Team www.skoptionstrading.com

6 August 2009
Upcoming OPTIONTRADER Signal: Shorting Crude Oil This is to give advance warning to our subscribers that we may begin building a short position on crude oil as early as the next trading session. This will probably begin with puts on USO, October series, $40.00 strike price (please note that the $40.00 strike price on the price of USO not the actual crude price, USO simply reflects the crude price). We intend to start small as we move into this position, and build it up if events pan out as we think they will. Our target for oil is below $60. We think this will be caused by the markets realizing that they are no real "green shoots" which damages the bullish economic fundamentals for crude, and also with crude inventories at very high levels, we feel the price will correct a bit. Gold is currently too overbought for us to take a long position, but we intend to begin building one once prices fall slightly. As always, we welcome any comments or questions you may have. Regards,

The OPTIONTRADER Team www.skoptionstrading.com

30 July 2009
OPTIONTRADER: Update Commodity Sell-Off May Lead To Trading Opportunities Gold, silver and oil are just a few of the commodities that have sold off in recent trading, being hit by the recent uptick in the US Dollar and rumors of speculation curbing coming from Washington. The US dollar appears to have found significant support in the 78-79 region, and is now moving towards a minor rally which we think will continue to hit commodity prices. In particular we are looking at gold as it is inextricably linked to the greenback and has good bullish fundamentals going forward over the longer term. We intend to begin building a long position on gold shortly, when we feel the yellow metal is oversold. Ideally we would like to see another $50 or so off the gold price, moving it closer to the 200 day moving average before we begin to buy. As outlined previously, we are going to be layering in and out of positions from now on, and so when we build our long position on gold, it will be via a number of purchases which will ease us into the position comfortably and substantially lower the risk of the trade. With a few more sell offs like today, we could begin buying fairly soon. It is our intention to acquire a long position on gold before September and its seasonally strong period. As always if you have any questions or comments, please let us know. Regards, The OPTIONTRADER Team www.skoptionstrading.com

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