Options investors are increasingly betting on further upside in gold, according to quantitative trading firm Susquehanna. The precious metal has rallied while one-month implied volatility remains near recent lows, allowing investors to increase upside exposure without paying higher premiums. The purchase of 8,000 November 460 calls on the SPDR Gold Trust for about $5.55 illustrates this strategy, with the ETF closing at $405.49 on Monday. Skew has shifted materially from downside puts to upside calls, reversing the summer setup when put protection was relatively richer. Gold funds have seen their strongest inflows since January, with spot gold at $4,428.43 per ounce.
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