Now is the time to short sell gold miner volatility: Michael Purves
Volatility in Market Vectors Gold Miners ETF (GDX) is at multi-year highs and “never sustains these levels,” providing a unique short sale opportunity for those focused on options trading, according to Michael Purves, Chief Global Strategist and Head of Equity Derivatives Research at Weeden & Co.
“My particular focus is on implied volatility and so the trade that I’ve been recommending is actually to sell volatility on the GDX, which is at multi-year highs right now and it never sustains these levels.”
“If you’ve been following the price actions, even on these bad, ugly days, the implied volatility really barely moves.”
“What the options market is telling you is that we get it, these thing have declined a lot…we get it, we’re getting into this range-bound trading, and that volatility I think sets up a great short sale for those focused on options.”
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