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September 30, 2013  Mon 4:14 AM CT

GLD: SEE CHART GET CHAIN FIND STRATEGIES
A huge call spread sees the SPDR Gold Shares exchange-traded fund returning to levels last seen in early May.

A trader bought 17,500 November 136 calls for the ask price of $1.35 and sold the same number of November 141 calls for $0.59, according to optionMONSTER's Heat Seeker tracking system. The volume was about 10 times the previous open interest at each strike, clearly showing that this is new positioning.

This vertical spread cost $0.76 to open, which is the maximum amount at risk in the trade. The maximum potential gain is $4.24, which would be realized with the GLD above $141 at expiration in seven weeks. (See our Education section)

The GLD gained 0.92 percent on Friday to finish the week at $128.97, in the middle of its range for the last month. Shares were last above $141 on May 9.

More than 205,000 GLD options changed hands on Friday, twice its daily average for the last month.
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So far, my articles have taken you through a logical progression of option theory and fundamental concepts of options. As of yet, I have not mentioned a single strategy and for a good reason! The actual application of a strategy should come AFTER you learn about the option product itself.

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