Susquehanna Says Options Investors Are Betting on Rising Gold Prices
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.
