Learn the trade here. Make it on tradeMONSTER

Options Trading News

February 14, 2013  Thu 4:47 AM CT

GLD: SEE CHART GET CHAIN FIND STRATEGIES
A large trader apparently thinks that it's a great time to get long gold.

optionMONSTER's Heat Seeker tracking program detected the purchase of 11,000 May 172 calls in the SPDR Gold Shares fund for $0.79 and the sale of an equal number of May 188 calls for $0.14. Volume was more than 29 times the previous open interest at each strike, indicating that new money was at work.

Known as a bullish call spread, the trade is a highly leveraged strategy that will earn huge profits--but only if the fund retraces its selloff of the last six months and rallies back to new 52-week highs. With the GLD now at support levels from last summer, the transaction reflects a belief that bullion is getting ready to rally. (See our Education section)

It cost $0.65 to open the trade, which will expand to $16 if the fund closes at or above $188 on expiration--a profit of 2,362 percent. (See our Education section for more on how options can be used to amplify moves in shares prices.)

The GLD fell 0.53 percent to $159.05 yesterday and has been consolidating in its current range for the last 18 months. If the current level holds, it would represent a higher low from 2012's trough, which some chart watchers may consider evidence that the long-term uptrend remains in effect.
Share this article with your friends


Related Stories

GLD

Midday index, ETF option volumes

October 14, 2014

Total option volume is again strong at 8.6 million so far today, led by the major indexes and ETFs, according to optionMONSTER data systems.

GLD

Large trade looks for rebound in gold

October 6, 2014

The SPDR Gold Fund finished last week at its lowest level in more than four years, but one large trader is looking for a rebound.

GLD

Midday index, ETF option volumes

October 3, 2014

Total option volume is running strong at 6.8 million so far todays, dominated by the big Index and ETFs, optionMONSTER data systems show.

GLD

Midday index, ETF option volumes

September 25, 2014

Total option volume is running well above average at more than 7.2 million so far today, with the primary indexes and ETFs topping the trade, according to optionMONSTER data systems.

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Free Webinars

Make Money in a Volatile Market

Education & Strategy

Vexed by the VIX

Many people probably don't know that the calculation changed for the CBOE Volatility Index this week, but it's worth discussing...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER