Options Trading News

April 12, 2013  Fri 11:17 AM CT

As gold plunges to a 22-month low, one large trader sees even more volatility ahead.

optionMONSTER systems show that a trader bought 25,000 April 140 puts in the SPDR Gold Shares Fund for the ask price of $0.51. The volume is more than double the previous open interest in the strike, clearly showing that this is a new position.

Less than a minute later, a block of 450,000 shares of the GLD was bought for $145.90. The combination of stock and options creates a delta-neutral trade that is betting on higher volatility in the shares and/or a sharp move in either direction. (See our Education section)

The GLD is down 3.62 percent to $145.59 this afternoon, its lowest level since June 2011. Shares were trading at $174 in early October. 
Share this article with your friends

Related Stories


Calls look for gold to shine again

November 19, 2015

Call buyers are looking for a rebound in the SPDR Gold Trust as the precious metal trades at its lowest level in more than five years.



The fastest money in the market
View full report »

Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »