Something Shiny That Could Be the Real Thing

The Option Pit VIX Light Is Red, and Volatility Is Likely to Drop.


Hey Traders,

 

We have a host of amazing traders here at Option Pit …

 

Among that group is veteran bond trader Bill Griffo and his Power Income letter.

 

Griff has been saying for months that there is a boatload of inflation heading our way.

 

And let’s think about the headlines we’re seeing all around today …

 

Driver shortages, staffing shortages at restaurants, and rising prices in food, lumber, housing, gas and metals …

 

You name it … and the price is rising!

 

This has me interested in SPDR Gold Trust (Ticker: GLD).

 

Gold has traditionally been a major store of wealth when inflation hits the U.S.

 

While it has yet to react so far, it appears that a breakout is starting form …

 

 

Now what really surprised me is where the CBOE Gold Volatility Index (Ticker: GVZ) is trading.

GVZ is the VIX index methodology on GLD options.

Take a look:


While GVZ is getting a bit of a pop today, the index is still
really inexpensive.

This makes me want to buy calls — because the option prices are cheap.

June 170 calls, which are at the money, are glittering at just $3.20. And GLD is up about 2.50 as of this writing.


The Option Pit VIX Light Is Red,
and Volatility Is Likely to Drop.

Your Only Option,

Mark Sebastian

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