Acorn: Scrooge McSquirrel
Monetizing Polarization. A convex play on Gold. The 🐿️ is not a goldbug.
24 March 2023
The 🐿️ is not a gold bug. Read elsewhere for doom porn.
Whether or not one sees the ‘yella fella’ as a hedge against inflation, deflation, geo-politics, the implosion of the fiat money system or the zombie apocalypse matters very little to us.
Ironically, the fact that gold is such a divisive and polarizing (almost religious) topic is precisely what creates an asymmetric investment opportunity.
Waiting for “The Big One” in terms of an outsized precious metals price move is a full time job (a religious calling even) for some. We have no idea if now is the time and do not want to rehash the big picture macro arguments. However, we note some interesting developments.
We have taken advantage of the ‘smile’ in GLD’s implied volatility curve to purchase a US$230/US$235 bull call spread (i.e., a US$5 spread / max payoff in the event that gold has appreciated by c.26% or more by 19th January 2024) for US$0.50 of net premium.
To the 🐿️, this looks like an attractive set-up …