Market News

October 13, 2016  Thu 10:01 AM CT

A large trader apparently believes that SPDR Gold Trust will be on solid ground for the rest of the month.

optionMONSTER's market scanners show that 5,500 Weekly 116.50 puts expiring on Oct. 28 were sold for $0.30 at the same time today. This is clearly a new position, as open interest in the strike was a mere 132 contracts before the trade appeared.

Short puts lock in a price where investors must buy a stock, while letting them collect premium. Traders use the technique when they like a stock and think the risk of a big drop is limited. (See our Education section.)

GLD is up 0.18 percent to $119.95 in morning trading but is down 6 percent in the last three months.

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Four-Part Edition: Cash-Secured Puts, Covered Calls, Stock Replacement Calls, and Protective Puts

We are finishing this year's editions of Advantage Point Newsletters with a "best of" review of the simple options strategies that should be the basic foundation for any investor.

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