A Massive Options Bet on the SPDR Gold Trust ETF (GLD)

An options trader eyed 125-strike call options on the SPDR Gold Trust ETF (GLD)

by Josh Selway

Published on Apr 7, 2016 at 2:07 PM
Updated on Apr 7, 2016 at 2:09 PM

Options traders are jumping on the SPDR Gold Trust ETF (GLD) today, with calls trading at twice the average intraday pace. Shortly after the open, one speculator traded 10,000 GLD July 125 calls for $2.29 per contract -- though this transaction may have been tied to a block of 1 million GLD shares that crossed the tape shortly thereafter. Historically speaking, GLD hasn't traded above $125 in over a year. 

Based on recent trends, call buying has been the strategy of choice among GLD options traders. The exchange-traded fund's (ETF) 50-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 2.27 -- in the 74th percentile of its annual range. 

What's more, call open interest more than doubles put open interest among options expiring in the next three months. This is according to GLD's Schaeffer's put/call open interest ratio (SOIR) of 0.42, which sits below 62% of all readings from the past year.

This call bias comes amid a big year for the gold-tracking fund. The SPDR Gold Trust ETF (GLD) has surged 16.5% in 2016, including a 1.1% gain today at $118.19, as "safe haven" assets surge amid the stock market sell-off -- bouncing back from recent losses.

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