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The Gold ETF Seeing a Volatility Explosion


And the beauty is, there's no particular reason for it!

So you're sick of watching options volatility melt away like the Bronco's lead in the AFC West. You're looking for a safe haven amidst a sea of Un-Dead Buy Write animals.

Well, look no further than SPDR Gold Shares (GLD) -- there's a veritable volatility explosion going on. As you can see in the graph of 30-day IV, options are barely down over the past six months in volatility terms. Not only that, they've rallied over 10% in the past few weeks (okay, 10% only translates to two points, but at least they're not imploding).

What's more, there's nary a skew. Options trade at pretty much the same volatility within the cycle, whether above or below the money.

And the beauty is, there's no particular reason for any of this. GLD options price from a world were gold moves in opposition to stocks. Thanks to Ben Bernanke's Money Machine, that's obviously not the case. The stock chart looks exactly like Google (GOOG). So does the 10-Day HV chart -- it's just the options that have a mind of their own.

Does this spell opportunity?

Well, I'm not going to say GLD options are a raging short here. But they sure look like a sale relative to other assets.

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No positions in stocks mentioned.
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