Gold at Record Highs: How to Lock In Gains and Manage Downside Risk

On January 26, the international gold price once again set a new historical record. As of today's intraday session,Spot gold once exceeded $5,090 an ounce, standing at the psychological barrierUS $5000/ozAnd hit a new high, continuing the strong upward momentum this year,The increase has exceeded 16-17% during the year。 COMEX futures gold prices strengthened simultaneously, precious metals were overall active, and silver and other metals also hit highs.

The overall institutional views are on the high side. Goldman Sachs' latest research report willGold price forecast raised to $5,400/oz from $4,900 at the end of 2026, and pointed out that private investors and central banks continue to increase their holdings of gold as the main supporting factor; Some analysts even believe that gold prices are expected to climb further to higher levels driven by rising geopolitical risks and safe-haven demand.

However, market risk warnings have also increased significantly. The current gold price is at a historical high, and some institutions warn that under high valuations and strong market conditions, there may be a short-termTechnical pullbacks and high volatility； In addition, the trend of the US dollar, changes in interest rate expectations and macro policy adjustments may all become important variables affecting the fluctuation of gold prices in the next stage.

Against the background of gold prices rising rapidly and running at historical highs, the medium-and long-term allocation logic of gold still holds true, but the risk of short-term fluctuations and callbacks has also increased. For the currentInvestors who already hold long positions in goldIn other words, it is particularly important to strengthen downside risk management while retaining a certain room for growth. Strategically, you can consider buildingCollar (neckline) strategy, while selling the upper Call to lock in part of the income, buying the lower Put to hedge potential pullback/retracement risks, thereby achieving in a high environmentBalanced Allocation of Return Constraints and Controllable Risks。

GLD Collar (Neckline) Options Hedging Strategy

1. Strategy structure

Investors currently100 shares already held$SPDR Gold ETF (GLD) $, current price$458。 In order to hedge against downside risks while retaining a certain amount of room for growth, constructCollar (neckline) strategy。

The strategy goes through:

• Sell out of the money CallGet premium

• Buy out-of-the-money PutProvides downward protection

ImplementControllable risks and capped returnsRobust configuration for GLDNeutral to stableOf judgment.

Spot positions (underlying assets)

• Holding: 100 shares of GLD

• Current price: $458

• Spot market value: = 458 × 100 =US $45,800

(2) Sell Call (upward cap, main source of premium)

• Sold 1 Call

• Strike priceKc = 500

• Premium received$4.6/share

This Call is much higher than the current price and belongs toImaginary value Call。 As long as the GLD expires≤ $500, the Call will expire and investors can retain all premium rights.

📌 What this section does:

• Limit maximum upside earnings

• Provide a source of funds for buying Put

(3) Buy Put (downward protection, lock in the lowest selling price)

• Buy 1 Put

• Strike priceKp = 415

• Payment premium$2.31/Share

This Put offers protection when GLD falls sharply, guaranteeing investorsYou can sell stocks at as little as $415, thereby locking in the maximum loss.

(4) Net premium of option side (per share)

Net premium = Sell Call − Buy Put = 4.6 − 2.31 =$2.29/Share

Initial net income

• Net premium (per share): $2.29

• Initial net income (100 shares): = 2.29 × 100 =$229

👉 The premium may be deemed to be:

• Reduce positioning costs

• Or partially hedge against future volatility

3. Maximum income (income cap)

WhenGLD expiration price ≥ $500Time:

• The stock was sold for $500

• Put failure

• Premium keeps all

Maximum earnings calculation (per share)

Stock spread income:

= 500 − 458

= $42

Plus Net premium: = 42 + 2.29 =$44.29/Share

Max Earnings (100 shares)

= 44.29 × 100 =US $4,429

📈 Conditions of occurrence:

• GLD expiration price ≥ $500

4. Maximum loss (risk lock-in)

WhenGLD expiration price ≤ $415Time:

• Investor Exercise Put

• Stock sold for $415

• Call failed

Maximum loss calculation (per share)

Stock losses:

= 458 − 415

= $43

Excluding net premium: = 43 − 2. 29 =$40.71/Share

Maximum Loss (100 shares)

= 40.71 × 100 =US $4,071

📉 Conditions of occurrence:

• GLD expiration price ≤ $415

5. Break-even point

Collar strategy onlyA break-even point：

Breakeven Price = Current Stock Price − Net premium = 458 − 2.29 =$455.71

Maturity judgment rules

• GLD > 455.71 → Earnings

• GLD = 455.71 → No Profit, No Loss

• GLD < 455.71 → Loss

6. Risk and return characteristics

• Maximum benefit:$4,429 (Limited)

• Maximum loss:$4,071 (limited)

• Clear profit and loss range, top and bottom caps

📊 Risk-benefit ratio (approximate): gain: loss ≈ 4,429: 4,071 ≈1: 0.92

7. Strategic characteristics and applicable situations

Strategy Characteristics

• A defensive strategy to hold spot

• Downside risks are clear and controllable

• Giving up Extreme Rally for Protection

• Suitable for shock or moderate trend

• Psychological pressure is significantly lower than naked stocks

Applicable situations

When investors judge:

• GLD unlikely to break through 500 significantly in the short term

• But hope to guard against the risk of sudden decline

• Pay more attentionSteady returns and risk control

• Don't pursue unlimited upside