The derivatives bet Armstrong is using to play the gold crash

clock

Armstrong IM managing partner Patrick Armstrong has added a new gold derivatives position to his portfolios to capitalise on the precious metal's escalating price volatility.

The price of gold suffered its worst two-day fall in three decades last Friday and this Monday, dropping 9% on Monday alone to hit a two-year low below $1,350. Armstrong (pictured) moved on Monday afternoon to sell put options with a $1,270 strike price, while also buying call options at $1,370 and selling call options at $1,460. The effect, he said, is to create a strategy which is still profitable at 7% below Monday afternoon levels, but which also enables him to capture a significant upside bounce. "We have sold put options with a $1,270 strike, and receive a premium of almost 5...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Commodities

Four Graphs explaining silver

Four Graphs explaining silver

Four experts write

Investment Week
clock 28 March 2024 • 2 min read
Charles Stanley Direct: Explaining the gold spike

Charles Stanley Direct: Explaining the gold spike

Reaching a record high

Rob Morgan
clock 05 December 2023 • 4 min read
London Metal Exchange wins legal case against nickel trading suspension

London Metal Exchange wins legal case against nickel trading suspension

Brought by Elliot IM and Jane Street

Elliot Gulliver-Needham
clock 30 November 2023 • 1 min read
Trustpilot