The SPDR Gold Shares Fund has been range-bound recently, but traders see little upside for the rest of the year.
The GLD exchange-traded fund is down 0.51 percent at $159.46. This is the middle of its range both from the month and its wider range for 2012 between $150 to $174.
optionMONSTER's systems show that a trader sold 7,500 December 170 calls for $6.80. The previous open interest at that strike was 3,683, so it is a new opening position.
This call selling was very likely done against long shares, given that the GLD was above $170 just at the end of February. As a covered call, the overall strategy would take a maximum profit if the GLD is at or above that $170 level by that expiration. But because it surrenders any upside beyond that level, the trade is only mildly bullish. (See our Education section)
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People get into option trading for a number of reasons, but there are three primary motivations: to increase income, to...
