Short-Term Gold Options Get Physical

June 16, 2012 at 09:45


The CME Group this week is amending its contract for short-term or weekly gold option contracts to allow for the physical delivery of gold.

“Investors had wanted a physically delivered contract as opposed to a financially settled contract,” says CME spokesman Damon Leavell. “I think that this will attract over-the-counter traders to the exchange.”

The short-term gold option contracts were originally launched about a year ago but fell short of expectations. Once approved, the options would be five-business-day contracts that launch every single day.

Short-term investing has become the norm of high-net worth investors according to a recent report by the World Gold Council.

“With the prospect of continued market uncertainty, the challenge for investors is to develop new strategies to cope with higher levels of ambient risk,” says Marcus Grubb, World Gold Council Managing Director.

The exchange currently has financially settled weekly options in gold, crude oil, and natural gas.