On That $2 Million Bet Of $1,800 Gold By October

Tyler Durden's picture

Some days ago, the broader media made a big deal out of an option trade worth $1 million that bet on a 37% drop ($25) in silver by July. We discussed it here. Yet the same media has been oddly silent on what over the past two days has been a trade that is double in capital at risk and involves gold futures. As can be seen on the charts below, between April 12 and 13, someone has made a bet that gold would jump to $1,800 by October, having purchased about 3,000 October $1,800 calls in GC. We are eager to hear how this particular trade that goes against the MSM's perpetual bias against precious metals is spun (if at all).

April 12:

April 13:

h/t David


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Pool Shark's picture


"All your Dips are belong to us."


optimator's picture

Perhaps Boob Blinker changed his mind on gold?

High Plains Drifter's picture

can you believe that guy. i remember i was listening late one sunday night and he got frosted when someone called into his show and was talking about the FED conspiracy, ha ha ha ha . this asshole is sooooooooooo yesterday's news........

Spigot's picture

Gold and Silver close week on highs for second week running. That's all anyone needs to know. Buy it if they smack it down early next week.

tmosley's picture

What happens to these bets when the COMEX goes bust?  

LawsofPhysics's picture

To the fucking moon with the eventual forced buyout in clown cash.  Timing is everything.

tmosley's picture

Let's hope so, for the sake of this poor, brave, dumb bastard.

NotApplicable's picture

Clown cash, LOL!

I'm guessing they keep an infinite amount of it in the trunk of their clown car.

spiral_eyes's picture

gold has no real value, fed can just print more of it. 

camaro68ss's picture

You cant eat gold but you can eat paper money.

I wonder if my shit would turn green???

Pool Shark's picture


I don't know if you can eat an iPad, but you can blend it:



spiral_eyes's picture

bernank rule of keynesian thumb: if you can blend it, it is deflating.

Thomas's picture

And then there's the Oprah Winfrey/bowling ball joke.

AlaricBalth's picture

Looks like Ayn Rand was right about this;

"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it becomes, marked: 'Account overdrawn"

Dexter Morgan's picture

Very nice.  There is a good video of Ayn Rand and and Mike Wallace on youtube from 1959.  Atlas Shrugged comes out today, BTW.  I will see it on Sunday.

Pool Shark's picture


Agree or disagree with her philosophy; she accurately predicted the ultimate end of democracy... which we are currently witnessing...


NOTW777's picture

too conservative

cxl9's picture

But didn't the guys who sold those calls take the other side of the bet, that gold won't hit $1800? Or should I not ask that question?

d00daa's picture

Sure you can.  In fact, if the MSM addresses this trade at all, I'm quite certain that they will "present" it by asking the very same question.

Congrats.  You're first to the party.  A regular Joe LaVorgna.

Mises's picture

The person on the other side of the bet is a market maker, who immediately hedged his position a minute after the trade

tmosley's picture

That's the point.  Lots of people think it won't go that high that fast.  But SOMEONE does, and he's betting a pretty penny on it.

I personally think its stupid.  He should be long physical, or standing for delivery.  But it takes all kinds.  I salute this guy.

SheepDog-One's picture

I agree, hell with puts and calls, you want to bet PM's go up then BUY them and put them in a safe!

Argonaught's picture

I disagree.  The guys playing the futures/options are making money off of the ridiculous public policy AND the people buying the physical.  And when the PMs crash (please don't tell me this time is different...it is just another round of fiat gone full retard...we have seen this before), the guys holding paper will get out a fuckload faster than you can even open your safe, let alone find someone else to buy your metal.  And this doesn't even account for the possibility that the govvies will come a'knockin' at your safe but it will be a lot harder for them to confiscate this clown's cash.

I accept that it is possible that there is a ton of fraud in Ft Knox and COMEX.  That is the one scenario where futures players could get crushed and holders of physical will not.  However, I also think that if/when that fraud is exposed, the likelyhood of being able to move physical into any kind of cash will be even worse. 

tmosley's picture

Your brain is full of backwards.

lol, you think they would confiscate gold from individual's safes before taking all the gold held in exchange and ETF warehouses?  What are you smoking?

And when did we see this before where it didn't end in currency destruction?  The 1970's is the only example.  That time was different, because the US was a creditor nation and could jack up the interest rate.  This time is like every time before that in history, where the US OWES shit tons of money.  This will end like all those other times.

Argonaught's picture

Really?  What do you think the increased reporting regulations for transactions with PMs are about?  What about the increased attention alt-currency groups are getting from the gov't?

Don't be a fool.  Your gold is much easier to take then that belonging to the banks (intra or extra-border).

Also, I agree, the fiat will die.  But when that collapse happens, nobody is going to want your gold.  So have fun with that.


d00daa's picture


Because throughout human history, after every failure of fiat, nobody has ever wanted gold.  Ever.

I'm speechless.


Argonaught's picture

Not at the inflated prices created during the collapse, they don't.  Sheesh.  It's like people actually believe gold is the only thing on the planet that only goes up forever and ever.

d00daa's picture

"It's like people actually believe gold is the only thing on the planet that only goes up forever and ever."  -Argonaught


Wow.  Nice strawman and/or horrid use of hyperbole.  Please point out concrete examples of "people" that actually believe that.  Thanks in advance.

When you'd actually like to discuss the real world, let me know.

Argonaught's picture

A tad harsh maybe, but fair and technically sound argument.  I will grant you that. 

As for the "people", I would argue anyone that thinks the answer to the coming collapse is holding physical metals.  They will not be worth more after the collapse...they will be worth less.  As will all assets.  Hard assets (I would consider land in a temparte climate a better one) are important to hold to protect earned wealth, but if you throw everything into metals, you will probably end up poorer than you started (ATTENTION: This is opinion).  

apartofthings's picture

You're missing the point. In a complete fiat crash, gold will of course lose some nominal value. But you will still be able to trade it for things, the price of which will have gone down. Buying gold as a speculative investment is silly, but using it to protect your purchasing power is not. And plus, after fiat crash, when sound money backed by gold is reintroduced, it will be great to have gold.

Banjo's picture

Argonaught: I am a massive fan of gold, silver and property and am fanstastically overweight metals at the moment 40% allocation. My goal is wealth preservation and hopefully some outperformance relative to other investment sectors.

There are periods in time when certain asset classes clearly outperform other sectors. I don't believe holding gold and silver will make me a billionaire by any stretch of the imagination. I do think these metals will at the very least hold relative value.


If the answer to the coming collapse (if it happens at all) is not precious metals what would you suggest?

  • Bonds
  • Cash
  • Stocks (any particular sector)
  • Overseas stocks (which country?)
  • Farm land
  • Potash
  • I like commodities I can't easily and inexpensively store oil, soybeans, corn, sugar, cotton wheat as easily as Gold or Silver.
  • I have a store of food.
  • Is it worth getting into debt for any of the above?

I am really interested in what you see as an alternative here is a hypothetical portfolio one million dollars NO DEBT. Still alot of money today!

My allocation is 55% property including fixtures and fittings (basically own your own affordable home debt free and never pay the banks another cent of interest should be everyones goal) 5% cash 40% precious metals currently allocated 32% gold and 68% silver.

I'm interested in peoples alternate investment view to metals given the current climate.

Thank you.


faustian bargain's picture

Poorer how? PM's are a sound alternative to cash or money in a bank. If we're talking about a "collapse"...what is cash, after a collapse? Anything is going to be better than a fiat note, once those become worthless.

For those of us who, in this hypothetical collapse, will own only what we physically possess, anything that is worth something in physical trade to other people is worth having.

I can't think of anyone who will be "richer" post-collapse than they were pre-. Everyone will be "poorer"...the question is, who will lose the least?

hamstercheese's picture

I think before anyone starts to predict the value of PM's after a fiat crash, you have to ponder what a fiat crash means...it means we have lost our medium of exchange..it is losing its store of value and slowly using its unit of account usage (other countries are now cross trading their currencies sans the USD).  So when it loses it's medium of exchange it creates a problem for commerce and a vacuum of power.  What will fill it?  I doubt physical gold will.  Yes, PM's will go through the roof price wise denominated in USD but international trade and electronic commerce won't be conducted in it unless a new, universally accepted unit of exchange backed by PM's and/or other commodities appears.  There will be a gap in time when commerce is completely disrupted, imports and exports will screech to a halt and during this time gold and silver bullion may play a regional role in trade.  But gasoline, coffee, honey, beans, vitamines, dry milk, flour, rice, seeds...during the turmoil these could all be used in trade.  The NEW currency will have the same affect on US citizens as it did on the Dutch when they went to the Euro...I was told those citizens lost 1/2 their purchasing power during the conversion.  PM's won't become worthless but maybe illiquid for a while until they are deemed to be "money" by a currency replacement.

Banjo's picture

hamstercheese: Gold and Silver are never illiquid. If someone is selling oil or coffee and your nation has Gold and in the context of a hypothetical fiat currency collapse. Do you think those sellers will be willing to exchange for gold?

The real problem may be reluctance of gold holders to give up their gold. Which means that gold essentially becomes more valuable. As more volume of a soft commodity would have to be put on the table in order for a gold holder to part with their precious metal.

Current gold production is 2500-2700 tonnes per year. This is equivalent to about 1.3grams per person on the planet. One ounce of gold is 31.1 grams.


tmosley's picture

You are talking about house to house searches of people who are almost 100% armed and ornery when it comes to government intrusion.

As opposed to having a couple of officials go down, threaten the security guards, and have their own staff load up the gold for you with the banks, who don't care about the metal, but only paper profit--and they will get plenty of paper compensation.

Sorry kiddo, you don't know what you are talking about.  EVERYONE is going to want my gold.  It's just that few will be able to afford it.

Feel free to leave ZH and whack off to thoughts of "The Road".  That isn't going to happen, nor is Mad Max.  There are too many guns, too many engineers, and too much arable land in this country for people to get aggressive, starve, and decline in a permanent manner.  We will have a few tough years, but not much worse than we have now, as the government collapses.  We will move back to a smaller government and a gold standard.  Then prosperity will return.

Argonaught's picture

We will have a few tough years, but not much worse than we have now, as the government collapses.  We will move back to a smaller government and a gold standard.  Then prosperity will return.


Exactly...like Egypt, Greece, Rome, England...ooops.  

tmosley's picture

None of those governments collapsed.  Not in a real way.  When I say collapse, I mean bureaucrats are run out of the capital on a rail.

This happened in pretty much every country that has ever fallen sway to a tyrannical government.  People forget that that is not the natural state of things.

bothsidesnow's picture

+1800 TPTB will rig the game in their favor and their favor is not holding physical PM's. You can put a stop on a futures contract or in fact you can buy paper spot through a FX account and exit your position quickly or put a stop on it - it's the same as holding physical with more liquidity. I think the smart guys are the ones making FRN's from paper trades in the spot market  that will exit and then swoop in and buy physical from all the people that came late to the game. TPTB will always win that is why they are the TPTB.

All you let's get physical folks are betting on a one off - the end of world as we know it. That my friends is a very silly bet.

Long-John-Silver's picture

The crash of the US Dollar will happen overnight as it does with all currency crashes. Any PM's held in (ETF or Bank) vaults will evoraprate as the thieves will simply leave with it IF they actually held any physical metal. If you don't hold it you don't own it.

narapoiddyslexia's picture

The end of the world as we know it is in fact happening. Go research how many Chinese are buying gold and silver. Add in the Indians. Video interviews of gold and silver traders from these places are on line. Add in that the Chinese are going to dump their dollars and will pay more and more dollars for PMs as they value their dollars less and less. Between 50 and 100 million Chinese who can buy PMs, are being urged to do so by the Chinese government. Throw in several million Americans. Factor in that world mine production is about 600 million ounces. Factor in that photography still uses 100 million ounces, that jewelry, silverware, superconductors, electronics, biocides, and on and on takes another 500 or so million ounces, and what does that give you? The Chinese have done their math and they are going to do what they feel is in their own best interests, and it MAY bring the dollar down, or it may not. But PMs, especially silver have a long way to run. This is at its heart a geopolitical contest, and you are not factoring that into your analysis

narapoiddyslexia's picture

Sorry, I meant to reply to bothsidesnow...

seek's picture

I agree with rig the game in their favor. However, TPTB own the central banks. And the central banks are the largest holders of gold and they are accumulating more right now. That argues in favor of physical.