Amid Sharp Two-Day Drop, Traders See Rebound in Gold Over Next Month (GLD)
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Gold is having a tough day, dropping over $140 per ounce in New York. Reports have the move as the largest one-day drop in the precious metal since 1983 and the worst two-day drop since 1974.
But, some traders see the 'silver' lining in today's plunge. Market data has front-month at-the-money (ATM) calls priced around $5.45 per contract on the SPDR Gold Trust (NYSE: GLD), the world's largest gold-backed ETF. By comparison, at-the-money puts are going for $4.95 per contract. That means traders see more risk in a move higher over the next month versus further weakness.
Bloomberg-compiled data has a similar trend in one-week and 68-day options on the the SPDR Gold Trust.
The ETF is down 9 percent Monday.
But, some traders see the 'silver' lining in today's plunge. Market data has front-month at-the-money (ATM) calls priced around $5.45 per contract on the SPDR Gold Trust (NYSE: GLD), the world's largest gold-backed ETF. By comparison, at-the-money puts are going for $4.95 per contract. That means traders see more risk in a move higher over the next month versus further weakness.
Bloomberg-compiled data has a similar trend in one-week and 68-day options on the the SPDR Gold Trust.
The ETF is down 9 percent Monday.
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