23rd June 2016 went down in history as Britain voted to be excluded from the EU. Same as the majority of people, I did not expected this to happen. However, more importantly, as an investor, I benefited from this news.
In my previous article, I shared about using the straddle strategy on GLD to potentially benefit from the movements of this counter. You may read the article HERE
In summary, GLD was trading at $123.68 on 15 Jun 2016. The risk-reward analysis were as follows
On 24th June 2016, a day after the BREXIT referendum, the price of this counter is as follows:
On 27th June 2016, which is the 2nd trading day after the referendum, the price of this counter is as follows:
From a quick calculation, we can conclude that regardless we exit trade on day 1 or day 2 post BREXIT, the straddle strategy yielded a ......
Yes,at this juncture, Gold is a safer bet at least for 2016 when the BREXIT impact is really felt. Now, it’s just a starting.