Shares of the SPDR Gold Shares (GLD) are trading higher on the session by 0.44%, at $169.09. The fund rallied throughout all of August and September, but appears to have made a short-term top in early-October.
One trader is betting that movement in the GLD will remain muted over the next few weeks and is selling premium. A short while ago, the November $165/175 strangle was sold 10,000, on the bid, for $2.21. This trade coincided with the purchase of 470,000 shares of GLD at $169.13.
This buy-write is net short vol given the large amount of short contracts (almost double than a traditional buy-write). At $2.21, the strangle was sold at roughly 14.60% vol, which is inline with current IV30. 10-day realized vol is sitting at just 8.3%.
The SPDR Gold Shares seeks to replicate the performance net of expenses of the price of gold bullion. The trust holds gold and is expected to issue baskets in exchange for deposits of gold and to distribute gold in connection with redemption of baskets.