JPM launches buy-write gold play

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JP Morgan has launched a new play on gold that packages a buy-write strategy into a collateralised special purpose vehicle (SPV). The product, targeted at institutional and private bank investors, adapts traditional gold buy-write strategies, which combine long exposure with the sale of options. The product works by holding physical gold, a practice that has become increasingly popular throughout the financial crisis. It simultaneously sells out-of-the-money gold call options, like a typical