Courtesy of Jesse’s Cafe’ Americain
Gold call options were expiring today, and there was a concentration of options with a strike price of 1000. Let’s see if the metals can find a footing or if this correction from a short term overbought condition must continue further.
From UBS:
“October options expiry on Comex will take place at 2000 GMT today, and the greatest nearby open interest for October gold is at the $1000/oz strike… $950 and $1050 strikes also have very large open interest – and that open interest between $950 and $1000 is larger than that between $1000 and $1050. We believe this is a consequence of the recent quick move higher in gold from $950/oz rather than options traders explicitly expressing a preference for the downside. Given the large open interest at the $1000/oz strike, we would not be surprised if gold remains close to this level today, barring a sharp move in EURUSD. To the extent that long October-expiration positioning in the market may have been constraining the range, however, the rolling off of October options should free gold to make larger moves.”
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