$XAU, $GLD

The gold options market saw $1.75-M in block trades betting the precious Yellow metal could almost 3X in more than a year, surpassing the record.

Around Noon in New York Wednesday, 5,000 lots of a gold option giving the holder the right to buy the precious metal at $4,000 oz in June 2021 changed hands. The bets were sold at $3.50 oz.

“It’s like 18-month term life insurance; what will the world look like if gold is at $4,000,” the head of metals derivatives trading at BMO Capital Markets, said in an e-Mail. “They are hoping for a quick violent move,” he said, referring to the people who bought the call options.

Gold futures climbed to a record $1,923.70 oz in Y 2011 as the Fed bought more than $2-T in debt to stimulate the US economy. While bullion has rallied 14% this year, the precious Yellow metal is still 24% below the current all-time high.

Bullion for delivery in February settled at $1,460.80 oz at 1:33p in New York. Futures for June 2021 delivery, which settled at $1,494.40 Wednesday, will need to almost 3X before expiration to make the call options profitable for its holder.

Have a terrific Holiday weekend

  bets, bullion, call, expiration, GLD, Gold, metal, options, xau, yellow

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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