You can't fight the Fed.
Whether this market is like 1929 or 1999 either way the bulls had a good run until it burst into flames – much as the people on the Hindenberg had a lovely trip across the Atlantic with a bit of a rough landing in New Jersey.
So let's not spoil the party by worrying about the Future (or even the present for that matter) – let's just look at all the lovely things we can buy and make 500% this year if the S&P breaks 1,360 and heads higher on a sea of freshly printed Dollars, Yen, Euros, Francs, Pounds and, possibly even Drachmas (but ixnay on the Uanyay – no one wants to talk about that!).
Gold has got to be a good inflationary bet and ABX has lots of it. Currently trading at $47.61, you can sell the Jan $40 puts for $3.05 and that obligates you to buy the stock at $40 and you can leverage that $3.05 by buying the Jan $43/52.50 bull call spread for $4.40 for a net cash outlay of $1.35 on the $9.50 spread. That's a potential for 603% upside at $52.50 but, even if they flatline at $47.50, it's still a $4.50 win on the spread and the short puts would expire worthless for a $3.15 profit and that means you are starting out 233% ahead and all ABX has to do is not blow it.
Now, I'm going to do this one time to make it clear on margin. If you DON'T have a Portfolio Margin account, TOS says the margin on the above trade (for selling the Jan $40 puts) is $390 per contract. 3 ounces of gold are $5,190. If you run this spread with 10 contracts, you'll have $1,350 cash out of pocket and $3,900 in margin so close enough to 3 ounces of gold but these 10 contracts make $3,150 if ABX is at the same price at the end of the year and $8,150 if ABX is higher.
Of course we're assuming ABX is well-correlated to gold (and it is the World's largest gold miner so not too much of a stretch there) but clearly you are more likely to make $3,150 on this ABX spread than you are to see your $5,190, 3-ounce gold purchase gain $3,150 (60% – gold $2,768)…
