From the August 2008 issue of Research Magazine • Subscribe!

GLD (Finally) Gets Options

After a long four-year wait, trading of call and put options on the SPDR Gold Trust (GLD) has finally come to pass. The regulatory hurdles faced by both the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have been resolved.

Since gold is regulated by the CFTC whereas securities are regulated by the SEC, GLD's hybrid nature complicated matters, which slowed the process of listing options. Even though the trust's gold is held in a secured vault in the form of London Good Delivery Bars, GLD is still governed under the Securities Act of 1933.

Judging by the initial volume, trading in GLD options has been brisk. Call options with a strike price of $90 for the September expiration already had over 6,000 outstanding option contracts.

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Ron DeLegge is the San Diego-based editor of www.etfguide.com.

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