Options Traders React to Red-Hot Gold ETF

Gold futures nabbed an eighth straight win today

by Patrick Martin

Published on Jun 7, 2019 at 2:17 PM

Gold prices have been red-hot amid recent trade tensions, and today, August-dated gold futures locked up their eighth straight daily win as a weak jobs report weighed on the U.S. dollar. Below, we'll take a look at what this hot streak has done for gold exchange-trade fund (ETF) SPDR Gold Trust (GLD).

At last check, GLD was up 0.8% to trade at $126.77, and earlier nabbed a fresh annual high of $127.25. In addition to its own eighth straight win -- its longest winning streak since late 2017/early 2018 -- GLD is about to wrap up its best week since September 2017. Plus, the fund's surge has attracted a bevy of options traders.

Daily Stock Chart GLD

More specifically, GLD has seen 210,000 options change hands today, double what's typically seen at this point, and total options volume pacing in the elevated 99th annual percentile. The September 133 and 139 calls are most active due to matching blocks of 14,900 that traded earlier. This could indicate the initiation of a possible long call spread, where a speculator is targeting a move up to $139 by September options expiration.

Today's bullish bias echoes a broader trend seen among GLD options traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 95,263 calls were bought to open in the past two weeks, compared to just 49,669 puts. The July series, in particular, has been popular in recent sessions, with almost 41,500 contracts collectively added at the July 126, 128, and 131 calls in the past five days.


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