Gold Option

DEFINITION of 'Gold Option'

An option to buy or sell gold bullion at a future date at a set price. The date (delivery date), quantity and price (strike price), are all predetermined. The option is just that, an option, and is therefore not an obligation on the part of the investor to either buy or sell the gold.

BREAKING DOWN 'Gold Option'

An option is similar to a futures contract in that the price, date and amount are preset for both. The main difference between the two is that a futures contract is an obligation, or promise, made by the investor to uphold the contract whereas an option is not obligation.

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