Tuesday November 17, 09:14 PM
STOCKS NEWS US-Gold ETF gets bullish option play-analyst
Stocks on the move
Real (Frankfurt: BJU.F - news) -time Equity news
U.S. stock market report
1554 ET 17Nov2009 Gold ETF attracts bullish option play
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Shares of the SPDR Gold Trust, the world's largest bullion-backed
exchange traded-fund, rose 32 cents to $111.95. In GLD options, a large ratio
call spread suggests some investors expect the price of gold to rise sharply by
January 2010 expiration, said Interactive Brokers Group equity option analyst
Caitlin Duffy in a note. Gold bullion bulls bought about 15,000 calls at the
January $112 strike for an average premium of $3.88 apiece spread against the
sale of 30,000 calls at the higher January $122 strike for about $1.14 each.
The net cost of the spread was $1.60 per contract. She said investors employing
the strategy stand ready to accumulate maximum potential profits of $8.40 per
contract if GLD shares rise to $122 by expiration. Separately, this year's
rally in gold has helped triple option volume and open interest in GLD, with
current total open interest of 3.92 million contracts, vs. 838,000 at the start
of 2009, according to Trade Alert data.
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