Options Trading News

November 25, 2013  Mon 2:14 AM CT

A long-term position combined stock and options in the SPDR Gold Shares Fund as it traded near multi-year lows on Friday.

optionMONSTER systems show that the biggest option trade was in the January 2015 expiration. A trader sold 15,000 of the 161 calls for the bid price of $1.52 and bought 15,000 of the 105 puts for $5.

Less than 2 minutes later, 555,000 GLD shares were bought for $120.2165. So it appears that the combination was delta-hedged and therefore not an outright bearish play. (See our Education section)

The GLD was down fractionally to $119.92 on Friday, its worst close since coming off the lows of early July. Shares were up at resistance at $137 in late August.

Total option volume in the GLD reached 127,000 contracts on Friday against the daily average of 72,000.
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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.

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