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)

Josh Selway

Apr 7, 2016 at 2:07 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.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.

Follow @Schaeffers

$40 Gets You 4 High-Conviction Trades. Let's Go.

We just booked back-to-back double-digit gains on Celsius and Palantir in Trade of the Week, and we’re eyeing even bigger wins!

Every week starts with a fully defined options trade straight from the desk Schaeffer’s Senior V.P. of Research, Todd Salamone, backed by 30+ years of proven market experience and disciplined risk management.

Right now, you can get 4 total trades over the next 4 weeks for $40 – just $10 per trade.

👉 Sign Up Now to Receive Your First Trade!