CBOE launches contracts on gold and silver ETFs

The Chicago Board Options Exchange is to list options on two new precious metal exchange traded funds. Options on iShares’ Comex Gold and Silver Trusts started trading on Monday December 8, after receiving approval from the Securities and Exchange Commission.

The ETFs reflect the performance of price of, respectively, gold bullion and silver bullion, minus the trusts’ expenses.

Strike prices for the options on the gold ETF will start at five point increments, ranging from 65-85. The silver contract has a 1 point increment and will range from five to 15. Position limits are 20m and 25m contracts, respectively.

"Our members are very interested in ETFs. Their flexibility and limited risk are useful tools in the options arena," said a spokesperson for CBOE in Chicago.

Earlier this year, CBOE introduced its first options product on a precious metal ETF, SPDR Gold Trust ETF (GLD). Average daily volume has proven impressive, with over 40,000 contracts traded a day in August.

Barclays Capital is the designated market maker for the iShares ETF contracts. "They will play an important role in the introduction of these new products," said the spokesperson.

Barclays Global Investors is a leading players in the cash ETF market.

In the US, options on ETFs are offered on all six options exchanges. Futures on ETFs are offered by a partnership between Chicago Mercantile Exchange and the American Stock Exchange, combining CME’s E-Mini stock index futures with the Amex’s ETFs.

Vishala Sri-Pathma +44 207 779 8361 vsripathma@fow.com