No this is not the fifth day of the 12 days of Christmas carol, but the first day of an historically bullish trading opportunity for metalheads’ favorite precious shiny.
Since the introduction of SPDR Gold Shares ETF (NYSE:GLD) back in 2004, the ETF has seen a 13-4 record of bullish closes in the December to January OpEx period (i.e. first open following the close of trading on the 3rd Friday in December, through the end of trading on the 3rd Friday in January).
Now let’s compare that to the overall record this century for the underlying gold futures contract.
Since 2000, the gold futures continuous contract for the same December to January OpEx period has shown a 16-5 record of bullish closes.
In both cases, that’s a greater than 75% odds of a bullish close. The overwhelming difference is the way you can trade options on them.
GLD offers monthly flexibility to potentially take direct advantage of the time probability, while the /gc futures options force you to trade the active front month contract (which in reality ends about a month after the high probability time period).
Now all you silver fans are screaming what about it?
Well since the introduction of the iShares Silver Trust (NYSE:SLV) ETF back in 2006, the same OpEx period has shown a 12-3 record of bullish closes.
Compare that to the underlying silver futures (/si) continuous contract this century, which has shown a 15-6 record of bullish closes during that same time period.
So instead of paying attention for the so-called “Santa Claus rally,” you may want to watch for an opportunity to find exposure to this 21st century trend.
