Options Jive

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Where Is My Exposure?

Options Jive

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

We are constantly speaking to the importance checking correlations for the sake of diversifying the underlyings that we sell premium on. Today, we have used correlation in a slightly different way – to verify whether or not the ETFs that we trade actually have the exposure that we desire.

Tom and Tony look to the following markets to see what are the best ETFs to trade when trying to gain exposure to:

  • Gold
  • Crude Oil
  • US Dollar

In Gold, we found that while GLD, GDX, and GDXJ follow Gold quite closely, XME has not actually had the Gold exposure that we had imagined. Tom then finds some alternatives to trading USO when trying to trade Crude Oil. Finally, we conclude with the result that trading FXE is the best way to gain inverse exposure to the US Dollar. Tom finishes off the segment by remarking that the information here is "powerful stuff." Check out the video for more details.

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