Hedge your profits on gold says Barron’s.
Options activity shows a surge of bets against the metal and there’s an opportunity to protect your gains right now:
GLD’s November $122 put, the January $110 put, and the November $115 put saw increases of about 24,000 to 26,000 contracts, which increased outstanding positions by about 50%.
The action puts recent trading in the GLD in sharp, bearish relief. Since Sept. 20, major institutional investors have traded about two puts for every call, according to data from the Options Clearing Corp., which issues and settles all options contracts. The interest in GLD puts shows that the most sophisticated investors in the equity derivatives market are increasingly concerned gold’s massive rally will soon falter.
Investors who own gold in its various forms, including the SPDR Gold Trust that recently traded at $131, are advised to take advantage of unusual pricing dynamics in the put and call market that will protect gold-trading profits should the momentum driving gold’s price soon ebb as predicted by sophisticated investors and traders.
Then again, maybe it’s just the case of a bull market trying to shake you off. You can read about about options activity here
(Tip via Abnormal Returns)
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