Commodities have experienced extraordinary gains this year, especially metals, where gold, silver and base metals have recently seen near-vertical price spikes. But these rallies are seen by many analysts as increasingly losing momentum and likely to be subject to short-term volatility. Gold has already begun a slump that some analysts believe could take the price down to US $1250.

Still, most of those same analysts think that US $1250 would present a buying opportunity. And for many, an end of year target for gold of US $1500 is still on the table.

If you like the possibilities a pull back presents, you might consider bull put spreads as a way to play gold through the end of the year. Specifically targeting gold companies where there is more liquidity in the options.

Take a look at Goldcorp (Symbol G, Friday’s close $43.19) as a case in point. I would look at writing the G Dec 44 puts at $2.43 and buying the G Dec 38 puts for 43 cents. The net credit from this spread is $2.00 per share, which is your maximum profit. That occurs if Goldcorp is above $44 at the December expiration, in which case, both puts will expire worthless.

The risk is that Goldcorp declines or stays the same. If it is below $44 by the December expiration the December 44 puts will be assigned and you will be obligated to buy the shares. However, your risk is limited because you own the December 38 puts, which should the stock suffer a serious setback, allows you to “put” the shares to the investor who is short the December 38 puts. Your maximum risk then, is the $4.00 per share, which is the difference in strike prices ($44 strike less $38 strike = $6) less the $2 per share net credit received.

Another advantage is that the bull put spread eliminates the risk of a margin call. Your margin is simply your maximum risk.