imageFMX | Connect (Reported 10/31/2011)

The following is a report of Gold Option’s activity in the Over-The- Counter and Exchange traded venues. Information is compiled and summarized below. 











Summary

December Gold settled at $1,725.20 per troy ounce, a loss of $22.00 for the day.


Market Recap:

Gold opened lower, caught in the crossfire of a Japanese yen intervention that sent futures tumbling and investors back to buying the dollar. U.S. Treasuries were also higher.

Volatility was bid in the wake of a night that saw Gold trade 1705.50 on the lows. Some traders saw this as a dip to buy, and other market participants saw this as a sign that the sell-off will continue. One bearish speculator expressed his opinion through the purchase of the December 1650/1600 Put spread. Activity in the back months was mild, and both futures and options volumes were down from last week’s peak. Expect the market to be keenly attuned to the FOMC meeting starting tomorrow. Volatility finished approximately .75% higher on the day.

 

Directional Commentary: 

Options: Volatility was firmer on the day, but the trading in fences is inconclusive. Puts have been well bid for some time now, and the trend is still slightly toward the calls. Overall options activity today was light, and suggests the market could move in either direction. Conclusion: Neutral

Technical: December Gold sold off, touching 1705.50 on the lows before settling at 1725.20. The next objective for bulls is 1789, but today’s sell-off should have the bears on alert. Daily slow stochastics suggest gold is overbought and is likely to sell-off. The first objective for bears is a settlement below 1700, followed by the 100-day Moving Average near 1670. Conclusion: Somewhat Bearish

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Active Options

Z 1650/1600 P. spread

Z 1750 C

H 1500 P

 

 

ATM Volatility Curve:

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As of 1:30 P.M.

 

End of Day Straddles

GC      
  Future Bid Offer
Z11 1720 76 80
F12 1725 130 134
G12 1725 168 172
H12 1725 198 202
J12 1725 228 232
K12 1725 254 258
M12 1725 279 283
N12 1730 303 307
Q12 1730 325 329
U12 1730 347 351
V12 1730 365 369
X12 1730 383 387
Z12 1730 402 406

As of 1:30 P.M. 

 

 

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