This Week in Gold and Oil Volatility – 10/11/2013

The price of gold appears to be on a path of starting a new down leg.  The SPDR Gold Trust ETF (GLD – 122.60) was down 3% on the week and the CBOE Gold ETF Volatility Index (GVZ – 25.83) jumped over 4%.  That move in GVZ is of interest, but the October future was up 5.5% which leads me to think that some traders think a gold drop is coming sooner rather than later.  This October future is basically at parity with the index with only two days remaining until expiration.

The oil markets were fairly quiet which can probably be attributed to the markets having so much of a domestic focus.  The United States Oil ETF (USO – 36.75) was down slightly on the week and the CBOE Crude Oil ETF Volatility Index (OVX – 21.55) drifted slightly higher.  I did find the October futures at a 1.30 premium this close to expiration a bit interesting.  We’ll know if it was justified on Wednesday morning.

GVZ OVX

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Russell Rhoads, CFA

CBOE Options Institute

Russell Rhoads, CFA, is a Senior Instructor with the Options Institute at the Chicago Board Options Exchange. He joined the Institute in 2008 after a career as an investment analyst and trader with a variety of firms including Highland Capital Management, Caldwell & Orkin Investment Counsel, TradeLink Securities and…

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