Trade Ideas

TRADE IDEA - Gold Option Short Iron Fly and $200 Wide Risk Reversal

George Austin
September 9, 2019 11:15 AM
Futures Options Trade Idea

Futures Options Trade Idea

Gold Options Short Iron Fly 

 

Trade Idea: 

 GCZ9 1485 Puts+GCZ9 1545 Calls-GCZ9 1515 Straddle (Short Iron Fly) 77 days to expiry.

This trade might be worth looking at if you’re looking for a way to short volatility here, the trade closed around -25.51 on Friday.  Max payout would be -$30 outside 1485/1545 at expiry, with a $4.49 net risk.


 

Chart reflects the Volatility.
 


Risk Reversal revisited

This is a trade we highlighted 3 weeks ago as super extreme (7 year highs (Calls over)), it’s still holding extreme and probably worth a second look. Check out 200 wide Risk Reversals on Dec and Feb.  Trading close to highs.

 

Worth noting that Skew a year ago was very different.

 

 

Just remember, this is a trade idea only and not investment advice. Do your own research and consider your risk tolerance. Know your risk.

Disclosure: We may have trading positions in the same or highly correlated trading structures. 

 

 

 
About the Author

George Austin is a co-founder of Pricing Monkey. Pricing Monkey provides financial derivative pricing and analytics software that helps improve understanding of complex derivative positions.