Yo Pit Crazies,

The CPI number is coming out, and there has scarcely been a market in the last year that has cared less about it than right now.

Traders even started marking down volatility in the week after the CPI. Who the heck is selling a 13% vol with a number coming out?

The Sigma strip above is just the IVs for the S&P 500 Stock Trust ETF (Ticker: SPY) for each weekly option. Note they IVs are dropping from the 15th and beyond. It’s like traders want a headstart on the vol crush after the number.

I guess they know. Someone is jumping into a trade big – it’s not what you think.

Let’s find out what it is.

Buyers Are Jumping Into GLD Call Spreads in a Big Way

20,000 SPDR Gold Trust (Ticker: GLD) Jun30 205/225 call vertical spreads are getting some big play. 

There’s been a lot of news around gold lately, as the BRIC countries try to set up a currency block since the USA declared war on the rule of law for some dollar holders.

But this is not the first 20,000 call spread block that went up. For anyone counting at home, 2 million shares equivalent is 20,000 contracts.  

That sub-$1.00 spread has near the same pop as the $187 ETF for a fraction of the price.  While you never can be 100% sure on watching the Big Money Flow, this buyer looks hungry for a reason. Any debt dust up should send GLD flying.

This spread should do nicely if gold gets a pop.

The Rundown

Option Shopper

Licia making attendees happy with Taiwan Semiconductor Manufacturing Corp (Ticker: TSM) May12 84 calls closed for a 46% gain

To Your Trading Success,

AG