SPDR Gold Trust (GLD) Options Now Open for November 5th
Investors focusing on SPDR Gold Trust (GLD) can explore newly available options for the November 5th expiration. These options include both put and call contracts, each providing different investment opportunities.
Key Options for SPDR Gold Trust (GLD)
Among the newly introduced contracts, a notable put option exists at a $380.00 strike price. Currently, this put contract has a bid of $5.45. If an investor sells-to-open this put contract, they agree to buy GLD shares at $380.00. By doing so, they effectively lower their cost basis to $374.55 after accounting for the collected premium, assuming broker commissions are excluded.
This strategy offers a potential alternative to the current share price of $383.63. The $380.00 strike price reflects approximately a 1% discount to the market rate, indicating that this put option is slightly out-of-the-money. Current analytical data suggests there is a 66% chance that the put contract will expire worthless, which means the premium could yield a 1.43% return on the cash commitment, or an impressive 34.80% annualized.
Calls and Potential Returns
On the calls side, a $390.00 strike price option is also available, with a current bid of $8.80. If an investor purchases GLD shares at the existing market price of $383.63 and sells this call contract as a covered call, they agree to sell the stock at $390.00. This trade could result in a total return of 3.95% at expiration, excluding any dividends.
However, should the stock’s price increase significantly, this strategy could involve leaving potential gains unrealized. The $390.00 strike price is about a 2% premium over the current share price, making this call slightly out-of-the-money as well. Current odds of this call option expiring worthless stand at 51%. If the contract does not expire in-the-money, the investor retains both their shares and the premium. This scenario could provide a 2.29% additional return or a remarkable 55.66% annualized return.
Volatility Insights
Both the put and call contracts have an implied volatility of approximately 30%. Meanwhile, the trailing twelve-month volatility, considering recent trading data, stands at 19%. These figures are crucial for investors evaluating risk and potential returns in their options strategies.
For additional opportunities in put and call options, investors can explore further insights available on El-Balad. Understanding market dynamics and historical trading performances is fundamental for making informed investment decisions with SPDR Gold Trust (GLD).
