BOSTON: Open interest in deep out-of-the-money December gold call spreads on the Comex has built to roughly 11,000 contracts, a position that pays only if bullion nearly triples from current levels, despite a January correction that erased 11% in one session.
The positioning, detailed in a Bloomberg News report, centers on $15,000 and $20,000 strikes expiring in December, levels that sit far above a metal now consolidating near $5,000 an ounce.
Gold reached a record above $5,600 in late January before falling 11% on January 30, its largest one-day loss in decades, yet the upside bets have persisted rather than unwound into the pullback. The metal has roughly doubled since early 2024.
Comex gold over the past year: the late-2025 surge and the ~11% January pullback option traders are still betting through. Source: Yahoo Finance.
“It is plausible some traders see this as a cheap lottery ticket,” said Aakash Doshi, global head of gold and metals strategy at State Street Investment Management.
Doshi, who described the scale of open interest on such deep out-of-the-money spreads as surprising, noted that participants anticipating a near-term violent move higher could also profit by selling the spreads before their time value decays. The structure is inexpensive precisely because the strikes are remote, allowing a small premium outlay to control a large notional payoff should an extreme move arrive. That asymmetry has drawn capital despite the correction, the contracts functioning as low-cost insurance against a tail scenario rather than a base-case forecast.
The wagers sit alongside more conventional bullish calls from sell-side desks, including a JPMorgan Chase projection for gold near $8,000 by the end of the decade, framed around geopolitical tension, questions over Federal Reserve independence, and continued reserve diversification.
The persistence of these positions through a double-digit drawdown reflects how far extreme-upside hedging has become embedded in gold derivatives markets after two years of outsized gains.
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