Do you remember the recent gold drop of 11% in one day? While the crowd panicked, smart money was betting on the future.
There was an interesting movement on the Comex exchange: open interest in December call spreads (these are options strategies) with strikes at $15,000 and even $20,000 per ounce soared to 11 000 contracts. And this is after gold had already corrected to $5000!
What does this mean in simple words?
Someone is buying very cheap (relatively) 'lottery tickets' on the bet that gold will skyrocket by the end of the year — three times the current prices.
Experts call this buying a 'cheap lottery ticket'. You don't risk much money, but if a nuclear explosion of volatility occurs or some force majeure pushes the price into the stratosphere — you're in luck.
Why is this happening against the backdrop of a correction?
1. Hedge against global risks (inflation, geopolitics — the basics haven't gone anywhere).
2. Volatility. After such a historical collapse, the amplitude of movements can be very high. And options are the best way to catch this wave without buying the gold itself.
The moral for the crypto trader:
Even in a falling market, someone is buying calls at 2x-3x the current price. This doesn't mean they believe in an instant rise. It means they are hedging their portfolio or just taking a chance with small investments. Among us, there are plenty who are betting small amounts on crazy targets for Bitcoin, right?
P.S. The main warning from Uncle: Options are a complex thing. You can either strike it rich or lose everything (if you don't understand the mechanics). This is information for thought, not a guide to action.
