Explore Your Options  |  AUG 2006

Explore Your Options by Tom Gentile

Stocks & Commodities V. 24:8 (43): Explore Your Options by Tom Gentile Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C. BEST WAY TO PLAY GOLD I’m looking for ways to play gold with options, but have not found any. Are there any ways to play the recent rally? Gold has been hot lately and its volatility can create interesting trading opportunities. Some traders use gold futures to participate in the movement in the metal. Long-term investors sometimes buy and hold gold. The new StreetTracks Gold Trust (GLD) is an exchange traded fund that holds the precious metal. Shares of the fund trade on the New York Stock Exchange (NYSE) and the bullion is held in a bank vault. Shares of GLD can be bought and sold like shares of stock. However, no options are listed on the gold fund yet. That might change soon. If you are looking for a way to play gold in your brokerage account with options right now, there are a few choices. The first is to trade options on the gold mining companies. Newmont Mining (NEM) is the largest gold mining company by market value and its options contract is actively traded and liquid.

by Tom Gentile