With the U.S. equity markets hitting record highs and market volatility as reflected by the CBOE Volatility Index hovering near record lows, George Milling-Stanley, Head of Gold Strategy at State Street Global Advisors, argued that investors should look to gold ETFs such as GLD as a staple asset of choice for a well diversified investment portfolio.
“Put options, meanwhile, are more popular than usual. GLD put open interest of 1.03 million contracts is ranked in the 79th annual percentile, compared to the 12-month high of 1.32 million puts open on Sept. 15,” according to Schaeffer’s. “Peak put open interest of 41,259 contracts is currently found at the June 105 strike. Data can’t confirm how these puts were used, but those selling the contracts are eyeing a floor at $105. Those purchasing the puts expect GLD to tumble to two-year lows by June. The ETF hasn’t traded below the strike since January 2016.”
Tom Lydon’s clients own shares of GLD.