AUY is a gold name I've been watching. Had a great breakout from its multimonth channel, and then came back and failed the breakout. Currently the 50 day moving average is looking to hold price.
Here's the trade:
Sell AUY Jul 9 Puts for .60 or better
Price is currently pretty close to 9, and I don't mind getting assigned at this level.
So selling 9 at .60 puts your basis at 8.40, and with a max return of .60 that puts your return on basis at about 7% in about a month. If I am assigned, I'll be incorporating a covered call strategy to further reduce my basis.
You do have gamma risk here, which means if the position goes against you, the delta further increases and you can get "more wrong" the further down it goes. I'm willing to accept that risk with the premium that is on the market right now.
In terms of risk management, absolute worst case would be below the bottom of the channel and a break of the 200 DMA at 7.30.
This is a longer term play so it does require a bit of patience just to deal with it.