This episode of Options Jive discusses the current rally in gold and what it means for trade opportunities.
In the past week, gold has rallied 5.9%. This has only happened on a weekly basis 0.5% of the time in the past 10 years. Therefore, IV rank of gold is currently at 100%. While IV rank is high, gold’s IV is not at a historical high. Instead, IV is currently rising from historical lows.
In the past, we have seen that short option trading in gold has been profitable when IV rank is high, regardless of historical context. Even though IV is not historically high right now, IV rank is high, and that has shown profitable trades in the past.
Tune in as Tom and Tony walk through how to implement this information into a trade idea.