The headline promises profit. The headline assumes you can read a gold chart. The headline does not know who you are.
Gold sits at a technically precarious juncture, which is what technical analysts say when they've drawn enough lines on a chart that it looks like a spider web designed by a schizophrenic. Precarious means it could go up or it could go down, but if they just said that, you wouldn't click. The word "juncture" does no work here except to make the writer feel important. Critical juncture. Pivotal juncture. Precarious juncture. It's all the same juncture, and that juncture is "I need to file this article by 3 PM."
The good news, apparently, is that the options market is mispricing the risk. Translation: someone believes they've found a discrepancy between where gold might go and what options traders think gold might do. This person has decided to tell you about it instead of quietly making millions. Generous fellow. Real humanitarian. Probably the same kind of guy who finds a twenty-dollar bill and immediately holds a press conference.
The options market mispricing risk is like saying the weather forecast is wrong. Congratulations on your revelation. The options market misprices everything because it's composed of people guessing at probabilities while pretending they're doing math. Half of them are hedging positions they don't understand. The other half are selling premium because someone on Twitter told them it was free money. The idea that you, specifically you, have identified the mispricing before it corrects is adorable.
Here's how to profit: you can't. Not from this headline. Not from reading about someone else's chart interpretation. If the setup were obvious enough to explain in an article, it would already be priced in by the time your brokerage app loads. The technically precarious juncture will resolve itself approximately thirty seconds after you enter your position, and it will resolve in whichever direction causes you maximum financial pain.
The only thing precarious here is your account balance after you chase this trade.
Photo by Anne Nygård on Unsplash
Leave a Comment