Sunday, February 13, 2011

Gold and Silver Options Expiry

The gold price and the silver price movements near options expiry dates have attracted attention from some analysis. These analysts noticed a pattern where gold price and especially silver price regularly declines before options expiry. Such a price move causes many call options to expire worthless. They claim these moves are orchestrated to benefit the sellers of call the options.

Gold and silver options are options on gold and silver futures contracts. Gold and silver futures and options are traded on the New York Mercantile Exchange (NYMEX) and the Tokyo Commodity Exchange (TOCOM). NYMEX gold futures contracts (symbol GS) are for 100 troy ounces of 9995 gold. NYMEX silver contracts (symbol SI) are for 5,000 troy ounces of 999 silver.

NYMEX gold and silver options expire on the fourth business day prior to the future contract’s delivery month. The settlement type of the option is the physical metal underlying the futures contract. Delivery may take place on any business day beginning on the first business day of the delivery month or any subsequent business day of the delivery month, but not later than the last business day of the current delivery month.

2011 gold and silver options expiration calendar:

Contract MonthExpiry Date
January12 December 2010
February26 January 2011
March23 February 2011
April28 March 2011
May26 April 2011
June25 May 2011
July27 June 2011
August26 July 2011
September25 August 2011
October27 September 2011
November26 October 2011
Decemeber22 November 2011

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