Looking to short Gold, question

Optionpro007

Optionpro007

In the past when I have looked into shorting a commodity, currency or sector index using options I have made mistakes.

As in the case of not understanding the correlation between individual stocks in a sector which might trade different than the commodity they represent.

Gold is a good example.

I checked GLD and it has no options.

If I put any of the indices, GOX or HUI I fall into the trap of iliquidity and huge spreads, and still they don't follow GC to the T.

If I short the futures option contract I am playing the futures contract price and have the same issues of iliquidity.

Any opinions, guidance ?

Thanks.
 
Quote from yabz:

You could try options on NEM. They have better liquidity than the indices.
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Yabz:

Thank you for your reply.

The issue I have is that NEM @ $41.00 is already 20% lower from it's 2004 highs.

Gold (or GLD) the commodity is trading close to it's 2004 high and I think it is ripe for a short position.

I find taking a position on any gold stock as too risky since the move in them already happened.

Unless, if I knew that by Gold taking a dive it would automatically take the stocks in the sector with it.

So I'm lost.....
 
you can't be serious ... what months / strike prices

are you trying to execute ? you will need a futures broker that gives you COMEX pit traded options
but I am sure there is better liquidity there
that you indicate


-If I short the futures option contract I am playing the futures contract price and have the same issues of iliquidity.-
 
Quote from SethArb:

you can't be serious ... what months / strike prices

are you trying to execute ? you will need a futures broker that gives you COMEX pit traded options
but I am sure there is better liquidity there
that you indicate


-If I short the futures option contract I am playing the futures contract price and have the same issues of iliquidity.-
More...

You are correct I was looking into 2006 contracts. My bad.

My experience trading pit option futures contracts is limited.

Is it possible to get a better fill than just being filled at the ask? With higher commisions and large spreads trading these contracts is not very speculator friendly.

GTC orders are not accepted, should I expect to hagle price for a few days ?

Thank you for any comments or advice on this subject if you have any.
 
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