SPDR Gold Options Trading: Opportunities and Risks
Introduction
Gold is a popular investment option for many investors due to its inherent value and its ability to act as a hedge against inflation. In this article, we will discuss the options trading strategies for the SPDR Gold Trust (GLD) with a focus on the June 7th expiration. We will highlight two options contracts, a put and a call, that are of particular interest to investors.
Put Contract
The put contract at the $215.00 strike price has a current bid of $3.15 and represents an attractive alternative to paying $216.74/share today. The put contract has a 61% chance of expiring worthless, which would result in a 1.47% return on the cash commitment or 12.73% annualized return. The implied volatility in the put contract example is 15%, while the actual trailing twelve month volatility for GLD is 12%.
Call Contract
The call contract at the $220.00 strike price has a current bid of $3.60 and represents a total return of 3.17% if the stock gets called away at the June 7th expiration. The call contract has a 56% chance of expiring worthless, which would result in a 1.66% boost of extra return to the investor or 14.43% annualized return. The implied volatility in the call contract example is 16%, while the actual trailing twelve month volatility for GLD is 12%.
Options Trading Strategies
Before experimenting with options trading strategies, it is important to learn the basics. The tastytrade Learn Center is a great resource for beginners, with weekly platform demos and a trading simulator. It is also important to keep trades small when transitioning from a simulator to the real market.
It is also important to have a plan and stick to it, avoid herd mentality and overleveraging, and manage risk factors such as illiquidity and volatility. Tastytrade's built-in strategy menu and Greek columns can be used to measure these risks. Finally, it is important to consider tax implications when trading options.
Bitcoin Options Trading
The United States Securities and Exchange Commission (SEC) has initiated consultations on a proposed rule change for the trading of options on Bitcoin exchange-traded funds (ETFs). The SEC is seeking public input on the potential impacts of introducing Bitcoin options trading on the broader market, particularly during periods of market turbulence.
The SEC aims to investigate the potential effects of introducing Bitcoin options trading on the broader market. This review will focus on whether exchanges' current surveillance and enforcement mechanisms are sufficient to manage the distinctive characteristics of Bitcoin options. The SEC wants to ensure that proper measures are in place to handle market volatility and protect investors.
Conclusion
In conclusion, options trading is a great way to invest in gold and other assets. The put and call contracts for the SPDR Gold Trust (GLD) with a focus on the June 7th expiration are particularly attractive for investors. It is important to learn the basics of options trading strategies before experimenting with them and to consider tax implications when trading options.
