tradeMONSTER: Trade free for 90 days

Options Trading News

December 28, 2012  Fri 12:20 PM CT

GLD: SEE CHART GET CHAIN FIND STRATEGIES
Bullion has pulled back, and one investor is seeing a golden opportunity to get long the precious metal.

optionMONSTER's Heat Seeker tracking system detected the purchase of 10,000 March 170 calls on the SPDR Gold Shares exchange-traded fund for $1.07. An equal number of March 188 calls were sold at the same time for $0.15, resulting in a net debit of $0.92.

Vertical spreads such as this control a move between two prices, in this case $170 and $188. If the GLD rallies to the top of that range, the position would be worth $18--a profit of 1,857 percent. (See our Education section)

The GLD is down 0.44 percent to $160.45 in afternoon trading, continuing to remain trapped in a range in place since August 2011. The fund has lost almost 7 percent of its value in the last three months, especially after selling by hedge-fund manager John Paulson.

The declines have brought the fund back to its 200-day moving average, which could make some chart watchers think it's ready to bounce.

Calls outnumber puts by more than 2 to 1 in the fund so far today, according to the Heat Seeker.
Share this article with your friends


Related Stories

GLD

Traders go digging for gold again

November 28, 2014

Bullish traders piled into the SPDR Gold Fund on Wednesday for the second time in three days. The trade also follows upside action in the iShares Silver Fund.

Invest Like a Monster - Las Vegas: March 13-14

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

The Art of Trading: Forgiving the Spread

Education & Strategy

Know thy Greeks!

One of the most important roles played by the Option Pricing Model is the calculation of an important family of...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER