Middle East investors seek to profit from gold's inverted skew

News

Private banking investors in the Middle East have started to trade gold-linked products, such as call spreads and knock-out calls, as the commodity has emerged as one of the more popular structured product commodity investments for the first quarter (Structured Products, March 2009). During the past six months the gold price has peaked at $996 (in February) and closed at $893 on April 15.

"One of the interesting features of gold is that the volatility skew is inverted, meaning that, unlike equiti

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