===> GOLD OPTIONS <===
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A gold option is an options contract with gold as the underlying asset. A gold call option would give the holder the right, but not the obligation, to buy bullion at a future date at a set price, while a put option would grant the holder the right to sell it a predetermined price level. In this option, a gold futures contract would be the underlying asset securing the investment. The option agreement terms list details such as the delivery date, quantity and strike price, which are all predetermined.
Important Points:
Gold options are options contracts that utilize either physical gold or gold futures as their underlying instrument.
Call options on gold give the contract holder the right to buy the metal at a pre-set price before it expires, and put options the right to sell.
Gold options trading in the U.S. are listed on the CME COMEX and use gold futures (which in turn represent 100 troy oz. of gold) as its underlying asset.
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