Volatility of the Shorter Term Is 5 Times Greater

Our Short-Term Gold Options provide a cleared alternative to a well-established OTC product, as well as a familiar complement to our existing monthly gold options. With physically settled, automatically exercised expiries for the next five business days, they offer multiple benefits for those who are looking for exposure to gold or simply need the reassurance of a more precise hedge.

With realized five-day volatility more than four times as volatile as 20-day volatility, the shorter term can seriously impact profitability. Our short-term options provide a practical means to cushion portfolio profitability and manage exposure to fluctuating markets. And, automatic exercise (no contrary instructions) means immediate clarity at expiry. Once the market settles, all participants in the market know exactly what their positions are.

For market participants who have outright and options positions in cash or ETF markets, Short-Term Gold Options provide a viable alternative for hedging and arbitrage purposes. This is especially true of ETF options, which expire on Fridays. Portfolio managers and larger traders now have a real tool for managing short-term gamma and theta exposures. These options offer sophisticated market participants a means of smoothing out portfolio risk profiles, which could be adversely affected by short-term price movements.

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