A quick look at the latest CME options data for Gold shows some interesting signals. It looks like the bulls might be getting tired.
The Big Signal: We're seeing big trading volume, but the number of actual open positions (Open Interest) has barely changed.
Calls: 27,274 contracts traded, but only +2,933 new positions were opened.
What this means: This isn't new money flooding in. It's big players shuffling their decks and taking chips off the table.
What's happening with Calls? 🔼
Traders are closing out their winning bets on strikes like $3850, $3800, and
4000
The Takeaway 🎯
The market sentiment is shifting from bullish to neutral & defensive. Big players are:
Cashing out their profits on call options.
This kind of activity is a sign that an uptrend could be running out of steam.
However, another leg up for gold is still possible. The argument for this scenario is the presence of a futures hedge within many of PUT spread portfolios. The logic works like this: if the asset's price continues to rise, profits are taken on the futures leg, and the position is closed. This profit can then make the put spread a breakeven trade, essentially providing downside protection for free, even if the price keeps rallying.
As for me, main bias: short at upper ER (if you're unfamiliar with the ER concept, check out my profile for a detailed post on Expected Range).)
Entry on touch. Risk kept small.
The Big Signal: We're seeing big trading volume, but the number of actual open positions (Open Interest) has barely changed.
Calls: 27,274 contracts traded, but only +2,933 new positions were opened.
What this means: This isn't new money flooding in. It's big players shuffling their decks and taking chips off the table.
What's happening with Calls? 🔼
Traders are closing out their winning bets on strikes like $3850, $3800, and
4000
The Takeaway 🎯
The market sentiment is shifting from bullish to neutral & defensive. Big players are:
Cashing out their profits on call options.
This kind of activity is a sign that an uptrend could be running out of steam.
However, another leg up for gold is still possible. The argument for this scenario is the presence of a futures hedge within many of PUT spread portfolios. The logic works like this: if the asset's price continues to rise, profits are taken on the futures leg, and the position is closed. This profit can then make the put spread a breakeven trade, essentially providing downside protection for free, even if the price keeps rallying.
As for me, main bias: short at upper ER (if you're unfamiliar with the ER concept, check out my profile for a detailed post on Expected Range).)
Entry on touch. Risk kept small.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.