The Gold Carry
There is a tension at the heart of holding gold.
It’s been considered true money for millennia:
No counterparty. No credit risk. No dependence on a system that may or may not honour its obligations.
But it does not pay you. (nor is it supposed to, given that ist is money not credit).
This is usually presented as a trade-off; the price of monetary purity. Fiat yields because you are lending it into a system. Gold does not yield because it sits outside one. The two properties are bundled together, and conventional thought juxtaposes the two ideas as mutually exclusive.
I am not certain that is entirely right and with a little lateral thinking, there does exist a way to earn a yield on one’s yellow rock that doesn’t require any relinquishing of control or risk of assignment whatsoever. It was my most successful trade last year, allowing me to earn a cash yield of ~1.5% per annum, received monthly, and at the same time allowed me to fully participate in 100% of the upside run in gold over 2025.
It’s analogous to owning a house on which you receive monthly rent and yet on top of that you also benefit from the capital appreciation. Yet despite the effectiveness of this tactic and the potentially life-changing effects it can bring, I am the only person (to my knowledge) publishing about it.
The disinterest is astounding.
Today the tactic is explored again and for premium members, you’ll discover how I’m using it to generate an expected 15% annualised ‘rent’ on some spare gold holdings without ever being at risk of losing my physical bullion.
The Position
I start with a certain amount of physical gold exposure.
Given I hold bullion, which itself remains untouched; vaulted, unencumbered, and free of counterparty risk.
In search of cash yield and an uncorrelated source of returns, one that will pay off if gold stays flat-down I ask myself the following:
How many option spreads could be sold such that, even in the worst-case scenario — where every spread reaches maximum loss — the combined position remains net positive?
From there, I can logically deduce a the correct entry points and number of credit spreads to sell to create a win-win scenario.
In theory, it translates to approximately:
~1 spread per ~25–30 shares of equivalent exposure, depending on premium and strike selection.
Today I’m showing premium members the exact details, however it is that ratio, not the nominal dollar value, that’s the key. Everything else scales from it.
The Overlay
GLD is simply gold in trust form — a liquid wrapper around the underlying metal, subject only to a modest management fee.
Because it trades publicly, it supports an options market. And because gold attracts persistent speculative interest, that market tends to price implied volatility at a premium to realised volatility.
In other words:
The market routinely overpays for uncertainty.
That is the source of return.
The structure is straightforward:
Sell out-of-the-money call spreads against the underlying exposure
Size them such that maximum loss is covered by the gain in the physical at the long strike.
This transforms a directional bet, into a cash flowing asset.
The Trade Setup
Spread: 475 / 485 bear call spread
Contract size: 100 shares (standard US options)
Credit: $1.39 or $139 per spread
Width: $10
Max loss per spread:
(10−1.39) × 100 = $861
Max loss = $861 per contract
You may notice the expected value (EV) of the trade is negative. So if you blindly copy this you can expect to lose money. The genius is in combining the physical anchor and a roll management secret that flips the EV immensely positive.
