Someone Bet $5.9 Million That GLD Closes Over $121.18 By June 19

Jon Gold, Market Commentary, Precious Metals

This strategy is this is not a ‘slow drift higher’ type of strategy,’ she said. ‘If GLD were to just drift higher, these options are going to decay away and they are not worth nearly as much. This is a strategy that you would typically use if you were protecting a short position – you are afraid of a huge pop to the upside – or you’re trying to look bullish and again looking for that pop to the upside. – Stacey Gilbert, Susquehanna Group (from CNBC article)
CNBC reported that a $5.9 call option bet was place on GLD 120-strike options which expire June 19. Including the $1.18 per call premium, the trader is betting that GLD will close above $121.18 on or before expiration. That’s a 5% jump in price by then.

This post was published at Investment Research Dynamics on April 30, 2015.