Market News

December 13, 2016  Tue 10:12 AM CT

The SPDR Gold Trust is drawing a large downside trade ahead of the Federal Reserve's rate announcement tomorrow.

The central bank is widely expected to rates for the first time in a year. Higher rates usually pressure commodities such as precious metals.

Our systems show that 10,800 February 108 puts in GLD were purchased in one print for $1.90 today. This is clearly a new posiiton, as open interest was only 330 contracts before the trade appeared.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. These contracts are safer than shorting a stock directly, as the options limit the amount of cash that can be lost if shares rally. (See our Education section)

GLD is down 0.37 percent to $110.40 in morning trading and has fallen 12 percent in the last three months.

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From the AP Archives: If It's Not There...

I have talked at great length about the fact that as an individual investor, you do not have to be in the market at all times.

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