Tuesday, May 24, 2011

Bada bing

11:27 am (Hawaii) Bullish for gold? Fast Money reporting via Doug Kass that someone bought 50,000 gold call options between $1600 and $1800/oz (out of the money). They will expire in August-Sept, a total of $50 million in call premium paid — whatever that means. Kass says given the size of the purchase, it's likely a central bank or sovereign fund. Is this positioning for QE3?

Brian Kelly thinks it's China swinging for a home run, a win-win plus delivery of physical gold. Terranova thinks it's a good trade. Adami isn't sure central banks are allowed to buy calls. "If they're right, they'll make 10 times that."

What they say is always interesting, but doesn't affect my trades. They won't talk about Endeavour Silver or Extorre Gold Mines. Not today.

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