Bearish Options Activity Seen In Gold – Capfeather Brokerage Group
Wednesday October 2, 2013 9:32 AM
Bearish activity has dominated the Comex gold options market in the last few trading days, says Thomas Philippides, broker of Capfeather Brokerage Group. He says that “meaningful order flow” in gold options came from market participants “selling calls in some manner rather mercilessly” in the November, December and most notably April contracts. Philippides adds that puts were bought by the same participants. He says that calls above the $1,450 strike “will be cheap because they really have no chance of performing on any up move.” An option on a futures contract is the right, but not the obligation, to buy or sell a specific quantity of a commodity or a futures contract at a specific price within a specific timeframe. Selling calls and buying puts are bearish plays, while buying calls and selling puts are bullish trades.