Calls Sold On Ultra-Short Gold ETF (GLL)

Shares of the PROSHARES ULTRASHORT GOLD ETF

are trading higher today by 1.48%, currently at $42.43. The ETF has been falling as Gold futures have been rallying over the past few months. One trader is taking advantage of the recent break in gold from all-time highs to sell calls on this ETF. It’s a little confusing so try to keep up…this fund goes up 2x when gold moves lower by 1x. Calls sold on an instrument that goes higher when another goes lowers is effectively the same things as buying calls on the long instrument (though without the unlimited upside). To play something like this, I favor selling calls in the GLL and buying puts to play further upside in Gold. The PROSHARES ULTRASHORT GOLD ETF will seek to replicate, net of expenses, twice the inverse daily performance of gold bullion as measured by the U.S. Dollar p.m. fixing price for delivery in London. The fund normally invests assets in financial instruments with economic characteristics inverse to the index.