Gyroscopic Investing

At this point Gold (in the form of IAU) is about 18.5% of my portfolio. I like the 15/35 rebalancing bands, but can't help noticing how gold keeps bouncing off a bottom. Instead of going "all in" and truly rebalancing, what about buying next month ATM call options for the amount of shares I would've bought? It would only cost me about $500. Worst case, it stays flat or goes down and I lose that money. But given gold's volatility, I think there's a good chance I could easily double (which would happen if Gold moves just 2% up from where it is) or triple that money.  Plus time decay is not much of a factor with near month, ATM options. Especially given the fact that Gold has no dividends, this seems like a very low risk way to get in on the action without much commitment.  I suppose techically this is a VP play with money I can afford to lose, but using insights gained from my PP.

Also makes me wonder about the viability of a "mini PP" using call options on SPY, GLD and TLT as a way to play the market in my VP.

robg wrote: I suppose techically this is a VP play with money I can afford to lose

In the sense that the Pope is technically Catholic.

robg wrote: It would only cost me about $500. Worst case, it stays flat or goes down and I lose that money. But given gold's volatility, I think there's a good chance I could easily double (which would happen if Gold moves just 2% up from where it is) or triple that money.  Plus time decay is not much of a factor with near month, ATM options.

Can you show us the math on this?  I'm not sure you're correct.