Shares of the SPDR Gold Shares (GLD) are trading flat on the session. Currently, they are off just 0.04%, at $161.91. Spot gold has been on the rise over the past few days, making a major move higher mid-Wednesday following the release of the FOMC Minutes.
One trader is taking the opportunity to protect gains in the GLD and is buying put spreads. A short while ago, the August 31st $162/159 weekly put spread was purchased 1,238 times for $1.00. A minute later, the trader bought an additional 562 put spread for $0.99-1.00.
The Aug $159 weekly put was sold, on the bid, for $0.22-0.23, while the Aug $162 put traded between the bid/ask spread for $1.21-1.23.
Volume on the Aug $159 strike has since risen to 2,677 contracts; open interest is only 687. The $162 put has traded just under open interest, 2,190 versus 2,402 contracts.
The August $161 and $160 puts are also seeing trading, though that volume has all been below open interest.
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.