Short term
Trade view / 20 September 2017 at 8:24 GMT

Protecting gold downside risks post FOMC – #SaxoStrats

Head of Commodity Strategy / Saxo Bank
Price target: 1281
Market price: 4

Since its latest peak on September 8 gold has corrected by more than $50. During this time funds continued to increase bullish bets. The knowledge of such a relatively extended position combined with the close proximity of a key level of support carries the risk of a correction should the Federal Open Market Committee surprise. 

As we maintain a constructive view on gold we prefer to trade the downside risk through a short-dated option on the October gold future, expiring next Tuesday. 

Speculative positioning in COMEX Gold futures
Management and risk description

Gold option ticket

Parameters: Buy OG/V17P1300:xcme, expiry September 26 
Entry: $4/oz ($400 per contract)
Stop: No stop with the paid premium being the max risk
Target: Targeting an underlying price on gold of $1281/oz 
Time horizon: Expiry next Tuesday, September 26

Short-term view:
COMEX Gold future, first month cont.

 Source: Saxo Bank

Long-term view:
COMEX Gold future, first month cont.
 Source: Saxo Bank

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more
A compiled overview of Trade Views provided on is found here
22 September
ChristianK ChristianK
Hi Ole. Do you think gold has bottomed for now, and are you still holding on to this trade until expiry? It is currently in the money :-)
25 September
ChristianK ChristianK
Hi Ole. Good call on this one. The option expiries tomorrow. Do we just let it run out? Is it cash settled? Thx
25 September
Georgio Stoev Georgio Stoev
Options are American style, so you'd need to close before expiration if you don't want to exercise.
25 September
ChristianK ChristianK
Thanks Georgio


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