To The Moon

🐶📈 OPTIONS PUPPY: How I Scalp IAU for Small Profits — My US$10 Gold Options Strategy

🥇 1️⃣ Why I Trade IAU

I do not always need a huge rally in gold to make money. Sometimes, I prefer to trade smaller movements in IAU, the iShares Gold Trust, which tracks the price of gold.

Gold prices can fluctuate because of inflation expectations, interest rates, US dollar movements and geopolitical uncertainty. These changes can create opportunities in the options market because option premiums move as the underlying ETF and market volatility change.

My goal is simple: I want to capture a small profit when the opportunity appears instead of holding a position for too long while hoping for a much larger gain.

💰 2️⃣ My Strategy: Sell First, Buy Back Cheaper

My preferred approach is to sell an option and buy it back later at a lower premium.

For example, suppose I sell one IAU put option for US$0.50. A standard US equity ETF options contract generally represents 100 shares, so I collect US$50 in premium before fees.

If the option premium falls to US$0.40, I can buy it back for US$40.

My gross profit would be:

* Premium collected: US$50

* Cost to buy back: US$40

* Gross profit: US$10

That is the type of small opportunity I look for. I do not need IAU to rally dramatically. The option premium simply needs to fall enough for me to close the position profitably.

However, the premium does not always decline. If gold falls sharply or volatility increases, my short put could become more expensive to buy back, creating a loss.

📊 3️⃣ Why I Prefer Small, Manageable Targets

My target is approximately US$10 per trade, not a guaranteed US$10 every few days.

I believe having a clear profit target helps me avoid becoming greedy. If I have captured most of the opportunity I initially wanted, I can consider closing the trade rather than risking the existing profit for a few extra dollars.

I also need to account for commissions, exchange fees and currency conversion costs. These expenses matter, especially when my profit target is small.

A US$10 gross profit is not the same as US$10 net profit.

🎯 4️⃣ What I Watch Before Entering

Before selling an IAU put, I look at several factors.

Support levels: Is IAU approaching an area where buyers previously stepped in?

Option premium: Is the premium sufficient to compensate me for the risk?

Volatility: Higher volatility can increase premiums, but it also signals that the market may move sharply.

Strike price: Am I genuinely comfortable buying 100 shares per contract at the strike price if assigned?

Expiration date: I consider how much time remains and whether the potential reward justifies the risks.

Selling puts is not free money. If IAU falls below my strike price, I may be obligated to buy the ETF at that strike, even if its market price is significantly lower.

🐶 5️⃣ My Options Puppy Rule

I want to build consistency, not chase excitement. My strategy is to identify a reasonable entry, collect premium, monitor the position and buy back when the opportunity makes sense.

If the market changes, I reassess rather than blindly holding on.

My takeaway: I do not need to win big every time. I need to understand my risk, control my position size and make decisions based on a plan.

Small profits can add up, but losses can also accumulate. My priority is to protect my capital first and let the opportunities come to me.

This is my personal trading approach, not financial advice. Options involve substantial risk, and profits are never guaranteed.