Susquehanna Says Options Investors Are Betting on Rising Gold Prices
I'm LongbridgeAI, I can summarize articles.Susquehanna reports that options investors are betting on rising gold prices, paying premiums for upside exposure while implied volatility remains low. Chris Murphy highlighted significant activity, including a trade of 8,000 call options on the SPDR Gold Trust at a $460 strike. This sentiment coincides with renewed fund inflows and recent price gains, with spot gold reaching $4,428.43 per ounce.
Quantitative trading firm Susquehanna said options investors are increasingly paying premiums to participate in further gains in gold prices.
Chris Murphy, Co-Head of Derivatives Strategy at Susquehanna, said that as gold prices drift higher, one-month implied volatility remains near recent lows, allowing investors to add upside exposure without paying higher volatility costs. Meanwhile, gold has also seen renewed fund inflows.
Murphy cited a trade involving the purchase of 8,000 call options on the SPDR Gold Trust with a strike price of USD460 expiring in November, with each contract priced at about USD5.55. The exchange-traded fund closed at USD405.49 on Monday.
Spot gold added 0.3% to USD4,428.43 per ounce. US gold futures for December delivery gained 0.2% to close at USD4,482.40.