FOMC meeting, are the metals priced in already?

[jupitergold]

There could be some great short term money to be made on highly leveraged metal positions. Give me your thoughts on the following:

- Will the Fed introduce QE2 or push it off till the next meeting?
- If they introduce QE2, is it already priced in with the metals?

Gold looks like it may be forming an iH&S pattern on the mid hourly charts. The right shoulder should took 3 days to form with a return to 1328spot aka close gap up.

I think they announce it because if they don't, market will decline strongly that day. Gut tells me the metals already priced it in, but traders will push it up that day/next day. If we get the 132? spot return, I'm buying 1350 Dec. calls :cool1:

[Gcubed]

To sell options is to be the bookie.
To buy options is to be the gambling degenerate.
Bookies retire to Miami.

[jupitergold]

Don't rain on my trading parade!

[Gcubed]

Don't rain on my trading parade!

Ya don't like Miami?

[jupitergold]

Ya don't like Miami?

Love it, wanna buy some options? :reddy:

[Gcubed]

Love it, wanna buy some options? :reddy:

Not taday. Gunna go play da Power Ball! ;)

[jupitergold]

Bought a bunch of GLD Dec10 132 calls just now at 1328.8 spot gold. Gonna take a shot that the weekly low in gold is in.

C'mon Big Ben, say you're going to print till you run out of ink and trees.

[Gcubed]

http://www.youtube.com/watch?v=I-hl6yAsFKQ

:bandit:

[jupitergold]

Haha,

Up 10% so far on my calls :party30:

Gapped up, they will close them on the low minute, but like the volume increase. Need a strong volume day today or tomorrow, 150,000 contracts would be nice.

[Gcubed]

Haha,

Up 10% so far on my calls :party30:

Gapped up, they will close them on the low minute, but like the volume increase. Need a strong volume day today or tomorrow, 150,000 contracts would be nice.

Just don't git greedy cuz pigs git slottered! Leave a bot o' meat on da bone... ;)

[jupitergold]

Option charts via optionsxpress.com for Dec GLD. 5th column in from the left is today's volume, next column is open interest. Everything to the right of the center price are calls, opposite side is puts.

Chart 1
http://i591.photobucket.com/albums/ss357/jupitergold1/dec10gldoptioncharts1.jpg

[jupitergold]

Same thing, December GLD options list

Chart 2 with commentary:


http://i591.photobucket.com/albums/ss357/jupitergold1/dec10gldoptioncharts2.jpg

150 GLD would represent 1520-1525 spot gold. That's a big piece of volume for today and here's the thing, if it's a volitility play, an .11 move in those calls result in a 50% return on your money. If spot gold hits $1500 by the end of the year, buying us a place in Miami.

[Gcubed]

Grassyass Jupe ;)

[jupitergold]

May need to keep buying more options:

Fed Asks Dealers to Estimate Size, Impact of Debt Purchases
The Federal Reserve asked bond dealers and investors for projections of central bank asset purchases over the next six months, along with the likely effect on yields, as it seeks to gauge the possible impact of new efforts to spur growth.

The New York Fed survey, obtained by Bloomberg News, asks about expectations for the initial size of any new program of debt purchases and the time over which it would be completed. It also asks firms how often they anticipate the Fed will re- evaluate the program, and to estimate its ultimate size.

With their benchmark interest rate near zero, policy makers meet Nov. 2-3 to consider steps to boost an economy that’s growing too slowly to reduce unemployment near a 26-year high. Financial-market participants are focusing on the size, timing and maturities of likely purchases aimed at lowering long-term rates, with estimates reaching $1 trillion or more.

“If they buy too much, I think there’s a real chance that rates are going to rise because people are worried about inflation,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “If they don’t buy much, they’re not going to have a market impact.”

William Dudley, president of the New York Fed and vice chairman of the Federal Open Market Committee, set expectations of about $500 billion for a new round of so-called quantitative easing, a figure he used in an Oct. 1 speech.

Investor Concern

“What the market wants to hear is that the Fed is going to buy $1 trillion” of Treasuries, said Joseph Lavorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. “Concerns that it might be less is causing investors to worry about how deep and broad this program is going to be.”

Treasuries rose for the first time in seven days today, pushing the yield on the benchmark 10-year note down two basis points, or 0.02 percentage point, to 2.698 percent as of 10:38 a.m. in London. The yield climbed to the highest in more than a month yesterday on speculation that the Fed will buy less debt than some traders had been expecting.

Europe’s Stoxx 600 Index increased 0.7 percent today and Standard & Poor’s 500 Index futures rose 0.3 percent.

The New York Fed’s survey coincides with a Treasury Department questionnaire asking dealers about the outlook for bond-market liquidity. Treasury officials say any additional program of asset purchases by the Fed won’t affect borrowing plans.

Avoiding Disruption

Treasury officials say they want to avoid any disruption to the $8.5 trillion market in U.S. government debt, the world’s most liquid, as the Fed weighs restarting large-scale asset purchases. The Treasury also doesn’t want to give any impression to investors, particularly those based overseas, that it might be coordinating with the Fed to finance the national debt.

“Treasury debt-management decisions are designed to deliver the lowest cost of borrowing over time and are entirely independent from monetary-policy decisions made by the Federal Reserve,” Mary Miller, assistant secretary for financial markets, said in an e-mail to Bloomberg News yesterday. Before joining the Treasury last year, Miller was head of global fixed- income portfolio management at T. Rowe Price Group Inc. in Baltimore.

The Treasury is scheduled to hold its quarterly meetings with bond dealers tomorrow, ahead of the department’s Nov. 3 refunding announcement.

Treasury Yields

The New York Fed surveyed primary dealers required to bid in U.S. debt auctions. It asked dealers to estimate changes in nominal and real 10-year Treasury yields “if the purchases were announced and completed over a six-month period.” The amounts dealers can choose from are zero, $250 billion, $500 billion and $1 trillion.

Deborah Kilroe, a spokeswoman for the New York Fed, declined to comment.

“Yields would have to back up” if the market is overestimating the size of Fed purchases, said Joseph Abate, money-market strategist at Barclays Capital Inc. in New York. “The dealer community is running much less leverage than they did before. The amounts of inventory they are financing is smaller. Their capacity to absorb extra supply is lower.”

The Treasury is watching for signs the Fed’s buying program might affect market operations. Fed purchases would take place as the Treasury reduces debt issuance, raising questions of whether the government would have to sell additional securities to avoid market disruptions.

‘Nuclear Option’

“That’s certainly kind of a nuclear option for Treasury,” Stanley said. “They would always and everywhere like to avoid that.”

Extra debt sales have happened just twice in the past decade, with so-called snap reopenings of existing securities in the aftermath of the Sept. 11, 2001, terrorist attacks and at the height of the financial crisis, in October 2008. The Treasury acted to shore up market liquidity and prevent a trading freeze caused by shortages of highly sought securities.

The Treasury has put a premium on selling its debt in a regular and predictable fashion. Those efforts may be tested by the Fed’s purchase campaign, which would take place in the secondary market rather than at Treasury auctions.

The Fed’s purchases might run as high as $100 billion a month, some analysts say -- almost equaling the entire amount the government is likely to sell.

‘Tugging’ the Wheel

“If the Fed commits itself to buying back the bulk of the Treasury’s net new issuance through open-market purchases, it will have more than one hand tugging on the wheel of federal debt management policy,” said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey.

Crandall said the frequency of note auctions, combined with low interest rates, “sharply increases the likelihood of accidental reopenings in the next phase of the rate cycle.”

The Fed is unlikely to buy up the entire supply of new securities, although it may adjust its internal guidelines of how much it can hold of any given issue. The Fed limits itself to owning no more than 35 percent of any specific security it holds in its System Open Market Account, or SOMA.

“Our Treasury strategists point out it could also cause pricing distortions along the curve, if, for example, the Fed continues to target a 40 percent purchase concentration in the 6-10 year maturity bucket, as it has in its recent purchases,” analysts at JPMorgan Chase & Co., including Alex Roever, wrote in an Oct. 22 research report. The report predicts the Fed will buy about $250 billion a quarter during the easing campaign.

The central bank makes the securities in its portfolio available to dealers through its daily securities lending operation, making it unlikely that Fed purchases alone would lead to an acute shortage of a given issue.

For now, the Treasury is doing everything it can to show borrowing independence. The department is extending the average maturity of its debt and ramping up sales of 10-year and 30-year securities while cutting issuance of the medium-term securities the Fed is more likely to buy

[jupitergold]

Sold all of my calls at this spike up to for a 16% total profit. I just think gold will pull back one more time to the 1320spot range before the Fed meeting. If so, buying them all back............ cheaper.

If I don't get my pull back prior to the meeting, will have orders set prior to the meeting.