Huge Options Bet On Gold Hitting $4000

IrishGuyIrishGuy Posts: 206 Bronze ✭✭✭
edited November 29 in About Gold
Interesting

https://www.zerohedge.com/commodities/mystery-buyer-makes-huge-options-bet-gold-hitting-4000

I could see it being an insider or similar to the GFC where people bet on subprime imploding

We have
A) Repo and potential rumour bank gone busy
B ) Chinese bank runs and nationalisation
C) Trade deal may be a bust after Trump signing HK bill
D) Central banks warning about financial system
E) Central banks repatriating and or buying gold for first time in forever
F) social unrest rising around the world. Even here in Ireland Farmers are protesting and blocking streets in Dublin !!!
G) Brexit

Probably others.

My question is a good bet or crazy and will never happen?

@IrishGuy

Comments

  • RocketDogRocketDog Posts: 823 Silver ✭✭✭✭
    That is an interesting scenario. Lots of people think a US economic collapse in 2020 is a sure thing. Plus all of the global uprisings you have already mentioned. If those things do happen then it is very likely that the price of gold will be much higher. But the way the prices have to line up for those particular options is a bit of a risk, isn't it?
    If you listen to the Keiser Report, they are always talking about loans being cheap because too much money has been given to the banks to lend out and there is really nowhere of value for the money to go. Maybe this is a symptom of that? Somebody with too much much money who has bought a lot of gold and would benefit from the price going up, is gambling some of their money to give gold some investment attention, and possibly benefit if they can push it up in price?
    If you have more money than you know what to do with and nowhere of value to invest it, then that would be a good thing to do (I think).
  • RegulatorRegulator Posts: 21 Copper ✭✭
    I wouldn't cite zerohedge for financial gains. Feel free to buy some reasonable call options that are size appropriate to risk for GLD, GDX, and GDXJ for June 2020 and march 2021. The likelihood of the market making it to 2021 without any sort of issue is unlikely. Cheers.
  • plashadpobedyplashadpobedy Posts: 23 Tin ✭
    I see it as a bet made by an idiot. First, it was out-of-the-money puts, which means they are 100% time-value, which means the time-value is deteriorating at a higher % ratio of the underlying, than if there were some intrinsic-value. We don't know the strike price, but whomever it was, they'll never make it to it to near -expiration. If those puts come into the money, the open-interest will give them a no-bid or very, very low bids. The exchanges are rigged (as is the whole market). The derivatives market is always open for would-be losers.
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