Gold Options Explained
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For centuries, gold has been coveted for its unique blend of rarity, beauty, and near indestructibility. Nations have embraced gold as a store of wealth and a medium of international exchange; individuals have sought to possess gold as insurance against the day-to-day uncertainties of paper money.
CME Group gold futures and options provide an important alternative to traditional means of investing in gold such as bullion, coins, and mining stocks. Gold futures contracts are also valuable trading tools for commercial producers and users of the metal. Commercial concentrations of gold are found in widely distributed areas: Seawater contains astonishing quantities of gold, but its recovery is not economical.
The greatest early surge in gold refining followed the first voyage of Columbus. From toCentral and South America and the Caribbean islands contributed significant quantities of gold to world commerce. Following the California gold discovery ofNorth America became the world's major gold supplier; from tomore gold was discovered than in the previous years. Bythe gold fields of Alaska and the Yukon were the principal sources of supply and, shortly afterwards, discoveries in the African Transvaal indicated deposits that exceeded even these.
The United States first assigned a formal monetary role for gold inwhen Congress put the nation's currency on a bimetallic standard, backing it with gold and silver.
During the Great Depression of the s, most nations were forced to sever their currency from gold in an attempt to stabilize their economies. Gold formally reentered the world's monetary system inwhen the Bretton Woods agreement fixed all the world's paper currencies in relation to the U. The agreement was in force untilwhen President Nixon effectively cancelled it by ending the convertibility of the dollar into gold.
Today, gold prices float freely in accordance with supply and demand, responding quickly to political and economic events. Gold is a vital industrial commodity. It is an excellent conductor of electricity, is extremely resistant to corrosion, and is one of the most chemically stable of the elements, making it critically important in electronics and other high-tech applications.
A broad cross-section of companies in the gold industry, from mining companies to fabricators of finished products, can use the CME Group gold futures and options contracts to hedge their price risk. Furthermore, gold has traditionally had a role in investment strategies, and gold futures and options can be found in investors' portfolios.
Proprietary criteria, definitions and logic are given to a computer which deciphers price, time and volume data, calculates Direction Starts and four types of activity. Computer also places the orders. The four types of activity are categorized and encoded as: Upward segments are caused by and feature, Buying that dominates selling.
Not all Buying starts continue. Downward segments are caused by and feature, Selling that dominates buying. Not all Selling starts continue. Pacific time and date of the new day are below. What problems have you experienced with markets? Have you identified what you need to improve? Without all three Ts: Moreover, what might be an alternative to you being fixated, stuck at your monitor s looking like an air traffic controller?
With demands for your attention and perhaps attendance, how can you be more consistent and precise at getting in when new trends start? Click here for a complimentary trial of Direction Starts chart service. One gold futures contract. Trading Hours Futures and Options: Open outcry trading is conducted from 8: Trading is conducted for delivery during the current calendar month, the next two calendar months, any February, April, August, and October thereafter falling within a month period, and any June and December falling within a month period beginning with the current month.
Trading is conducted in the nearest six of the following contract months: Additional contract months - January, March, May, July, September, and November - will be listed for trading for a period of two months. A month options contract is added from the current calendar month on a June-December cycle.
The options are American-style and can be exercised at any time up to expiration. Price Quotation Futures and Options: Dollars and cents per troy ounce. Minimum Price Fluctuation Futures and Options: Last Trading Day Futures: Trading terminates on the third last business day of the delivery month.
Expiration occurs on the fourth business day prior to the underlying futures delivery month. If the expiration day falls on a Friday or immediately prior to an Exchange holiday, expiration will occur on the previous business day. Exchange of Futures for, or in Connection with, Physicals EFP The buyer or seller may exchange a futures position for a physical position of equal quantity.
EFPs may be used to either initiate or liquidate a futures position. Or click here to see Chinese version 3mb pdf. Click here to see Metals Products pdf. Or click here to see Metals Options Strategies pdf. How can my computer trade for me? Please send me a complimentary trial of Direction Starts Questions Which market s do you want to see?
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