DTEJD1997 Posted December 9, 2020 Share Posted December 9, 2020 Hey all: Does anybody have any ideas for hedging the price of gold? Obviously, one can buy puts in GLD. Anybody know of anything else (leaving out futures)? Link to comment Share on other sites More sharing options...
thepupil Posted December 9, 2020 Share Posted December 9, 2020 Can you elaborate why GLD and/or futures dont work? They are liquid low cost pure derivatives of the metal (and have options for doing whatever you’d like to do (costless collar, puts, etc.) Link to comment Share on other sites More sharing options...
JRM Posted December 9, 2020 Share Posted December 9, 2020 It seems like futures (or GLD puts) would be the easiest and least expensive option. You could go to your local pawn shop and lend against the gold. Probably at a very high interest rate. Since you're wanting to hedge against price movements in the underlying currency, you could simply sell some gold and raise some cash. Link to comment Share on other sites More sharing options...
no_free_lunch Posted December 9, 2020 Share Posted December 9, 2020 Don't be an idiot and get too fancy. If you want to hedge gold just buy LEAPs on the bigger gold miners or GLD. Link to comment Share on other sites More sharing options...
DooDiligence Posted December 9, 2020 Share Posted December 9, 2020 Buy a suit and arbitrage the ladies. Link to comment Share on other sites More sharing options...
rkbabang Posted December 9, 2020 Share Posted December 9, 2020 Bitcoin Link to comment Share on other sites More sharing options...
rkbabang Posted December 9, 2020 Share Posted December 9, 2020 Bitcoin I was mostly joking, I think Bitcoin will replace a lot of gold investments in the medium to long term, but not really a good way to hedge the shot term price of gold. But: "According to the note, Bitcoin accounts for just 0.18% of family office assets vs. 3.3% for gold ETFs - a rebalance could bring many billions to the crypto at the expense of the yellow metal. They suggest a possible pair trade, buying one unit of GBTC vs. selling three units of GLD." https://seekingalpha.com/news/3642974-bitcoins-gain-may-equal-golds-pain-jpmorgan Link to comment Share on other sites More sharing options...
Gregmal Posted December 9, 2020 Share Posted December 9, 2020 The world could go up in flames and gold might what? double? Go to $5,000? So in other words...what BTC has been doing an a yearly basis? Link to comment Share on other sites More sharing options...
rkbabang Posted December 9, 2020 Share Posted December 9, 2020 The world could go up in flames and gold might what? double? Go to $5,000? So in other words...what BTC has been doing an a yearly basis? Yes, but bitcoin is going up regardless of the price of gold, so it isn't really a hedge on the price of gold. Link to comment Share on other sites More sharing options...
DTEJD1997 Posted December 13, 2020 Author Share Posted December 13, 2020 Hey all: Thank you for numerous, well thought out replies! This is what make COBF such a valuable resource these days. Link to comment Share on other sites More sharing options...
thepupil Posted December 13, 2020 Share Posted December 13, 2020 I think you are being sarcastic, but you asked how to hedge a commodity, not using ETFs that hold the commodity or using futures on said commodity... it’s not an easy question and not straightforward. Link to comment Share on other sites More sharing options...
JRM Posted December 13, 2020 Share Posted December 13, 2020 Hey all: Thank you for numerous, well thought out replies! This is what make COBF such a valuable resource these days. That's a bit snarky since you asked how to hedge without using tools designed for hedging. Link to comment Share on other sites More sharing options...
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