CBOE To Add Another Layer Of Gold Price Volatility, Launches Futures And Options On Gold VIX

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Mon, 02/28/2011 - 15:52 | 1004635 Oh regional Indian
Oh regional Indian's picture

I declare a blow-off top in arbitrage. The slices are getting finer and faster.

it is a sign...

ORI

http://aadivaahan.wordpress.com/2011/02/27/the-fascinating-dr-chippalone/

Mon, 02/28/2011 - 15:56 | 1004652 Bob
Bob's picture

It's trending toward absolute harmonic resonance, I can feel it!

Mon, 02/28/2011 - 16:01 | 1004663 Oh regional Indian
Oh regional Indian's picture

Bob, not sure if you are serious or kidding, but really, everything spiking together.

Sure feels like it.

ORI

Mon, 02/28/2011 - 16:12 | 1004704 Bob
Bob's picture

Frequencies are rising no matter how you look at it.

Mon, 02/28/2011 - 17:40 | 1005006 boricuadigm-shift
boricuadigm-shift's picture

Do you know your Golden Greeks?

Delta
Gamma
Theta
Vega

To the moon at Theta! :-)

Who needs the underlying anymore when you are Delta neutral?

Mon, 02/28/2011 - 17:11 | 1004910 Thomas
Thomas's picture

I thought CPDOs as well as squareds and cubes were pretty crazy.

Mon, 02/28/2011 - 15:55 | 1004642 Bob
Bob's picture

These boyz is on a roll now.  All in a dayz work, I guess.

Mon, 02/28/2011 - 22:31 | 1005758 RockyRacoon
RockyRacoon's picture

I'm all for it!  It has been crazy derivative stuff that has gotten us here.  More of the same will certainly hasten the end times.   Bring that garbage on!

Mon, 02/28/2011 - 15:56 | 1004648 Oh regional Indian
Oh regional Indian's picture

In another sign, in case some of you missed it (anyone affected here?):

GMail crash. Can you imagne losing all your primary e-mail?

Ponder that. Maybe back it up too, if you care.

http://www.bbc.co.uk/news/technology-12600179

ORI

Mon, 02/28/2011 - 16:07 | 1004678 stickyfingers
stickyfingers's picture

I miss just betting on black or red.

Mon, 02/28/2011 - 16:16 | 1004717 johnnymustardseed
johnnymustardseed's picture

Paper, paper, and more paper. Paper x3. World is fucked up

Mon, 02/28/2011 - 16:17 | 1004720 Quinvarius
Quinvarius's picture

Chinese people can't bury those under their huts for security.

Mon, 02/28/2011 - 16:20 | 1004740 johnnymustardseed
johnnymustardseed's picture

I guess it is just another way to deflate the value of something, create more fictional silver and gold. That gives the dollar a little longer life.

Mon, 02/28/2011 - 17:01 | 1004872 DiverCity
DiverCity's picture

Agreed.  Thereby resulting in a massively increased amount of dollar claims on a most finite amount of gold.

Mon, 02/28/2011 - 16:33 | 1004777 Mercury
Mercury's picture

Now you have two new ways to play derivatives of an index of derivatives...

Does Cerberus have an opposite...a dog with three tails?

Mon, 02/28/2011 - 16:33 | 1004783 -1Delta
-1Delta's picture

honestly gold futures do not have enough liquidity for this shit to work out that well IMNSHO

Mon, 02/28/2011 - 16:33 | 1004785 adonisdemilo
adonisdemilo's picture

another paper scam now

another disaster soon

another bail out shortly

 

Mon, 02/28/2011 - 17:28 | 1004972 Math Man
Math Man's picture

So what do we think gold vol will be when it drops below $1000 later this year?

Mon, 02/28/2011 - 17:37 | 1005009 JNM
JNM's picture

I'm betting something similar to where it dropped $250 from $1000, I'd say 40% would be a good target, at least.

Mon, 02/28/2011 - 17:46 | 1005032 tmosley
tmosley's picture

How many angels can dance on the head of a pin?

Mon, 02/28/2011 - 18:10 | 1005123 JNM
JNM's picture

Why are you wondering about coreographing angels?

In other news, an IV target, is anything but useless to debate.  If my 45% target is correct, but gold climbs another 12% before dropping 10%, I have to sell my 2013 straddles at least 7 months before expiry to brake even.  If I am too conservative with the 45% IV target, I'll take profits too soon.  If I hold out waiting for 45%, and it never comes to fruition, I'll lose money.

http://www.bloomberg.com/apps/quote?ticker=GVZ:IND

Mon, 02/28/2011 - 22:39 | 1005769 RockyRacoon
RockyRacoon's picture

Paper gold... good luck with that.

Mon, 02/28/2011 - 18:05 | 1005106 Non Passaran
Non Passaran's picture

May I ask, are you net short gold?

If you aren't, then what's the point of raising the issue. If you are, let us know how much or to what extent. Otherwise it's difficult to take your posts seriously.

(I am very net-long gold and PM miners.)

Mon, 02/28/2011 - 18:18 | 1005139 JNM
JNM's picture

Were you asking Math Man, or me? I'm delta neutral, at the moment, if anybody cares.  I'm a buyer on the next dip if/when we get one.

Mon, 02/28/2011 - 22:41 | 1005772 RockyRacoon
RockyRacoon's picture

Buyer of... what exactly?   More paper gold?   I guess the upside is that you can eat it.  Not very nutritious, but edible.

Got real gold?

Mon, 02/28/2011 - 23:38 | 1005930 JNM
JNM's picture

Sorry, if I wasn't clear. On a dip, I am a buyer of physical gold.  Right now, I'm a buyer of paper gold volatility. 

For one to buy more paper gold, one would already have to own paper gold.  Myself, I don't own any paper gold.

I do own the right to buy paper gold, and I do own the right to put on somebody else, some paper gold.  I intend to sell those rights in the future, when there is more uncertainty with the price of paper gold.  Right now, I don't care where physical gold goes in price, I'm trading volatility on paper gold.

It's more liquid, and much more likely that implied volatility explodes higher on an instrument like GLD, compared to derivatives on the physical. More can go wrong, with paper gold.  That's why I'm long the volatility.

I think the trade has more upside, with lower risk, than buying either physical gold, or domestic equities right now. I'm talking, on a 3 to 6 month outlook.

Hope that clarifies things for you.  I'm curious if you concur, or if you want to further mock what makes markets.

Mon, 02/28/2011 - 19:18 | 1005324 jackpagan
jackpagan's picture

Ha ha Math Man...your posts are always good for a chuckle. Hows that 76 handle treating you?

Mon, 02/28/2011 - 20:35 | 1005505 Harmonious_Diss...
Harmonious_Dissonance's picture

Hey I'm starting to think Methman is right. Just look at that car! Has to be right driving that thing

Mon, 02/28/2011 - 22:41 | 1005776 RockyRacoon
RockyRacoon's picture

And the beach house.   Don't forget the beach house.

Mon, 02/28/2011 - 17:34 | 1004997 JNM
JNM's picture

I think the CBOE is ahead of the trade, but they have to be.  No way does an asset move like gold has over the last decade, then just stop on a dime.  Gold will get volatile in the years ahead.

I'm starting to accumulate 2013 volatility on Gold, via GLD straddles. Considering the shit that could hit the fan, volatility is the only thing I feel comfortable holding for more than 10 seconds.

Mon, 02/28/2011 - 18:06 | 1005111 Bull_Colapse
Bull_Colapse's picture

LTCM!!!

Mon, 02/28/2011 - 19:32 | 1005374 dwayne elizando
dwayne elizando's picture

Scott's Collectibles in Kalamazoo Michigan is sold out of silver eagles and silver bullion! Usually well stocked! They did have some proofs and junk silver!

Mon, 02/28/2011 - 20:35 | 1005502 chump666
chump666's picture

betting against gold ETF's without owning them...yeah i can dig it. wise business decision.  since the SPYDR trust should implode at some point.

Mon, 02/28/2011 - 21:20 | 1005600 ziggy59
ziggy59's picture

Distraction Faction, is where the Action is

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