Gold calls hedge escalating US political risk
The guest argued that gold and long-dated gold call options are underpriced vehicles to hedge against escalating US political civil war and governance breakdown.
The argument
Gold has exhibited 0% correlation to both the S&P 500 and Bitcoin in 2025 while delivering strong positive returns. The guest highlighted that gold behaves as a 'stock up, vol up' asset, meaning a joint rally in the spot price and implied volatility can exponentially increase the value of call options.
The thesis, stress-tested
✓ What validates it
- ✓Gold implied volatility rising alongside spot gold prices
- ✓Further escalation in US political or budgetary gridlock
▸ Risks discussed
- ▸Historical asset correlations are unstable and can break down
- ▸Long-dated options suffer from time decay if the political catalyst does not materialize quickly
Hear it yourself
"Options are, however, valuable in light of a concentrated, highly valued market with uncertainty building in the jobs market, in tariffs, in US debt, and in an unfortunate yet dangerous escalation in not just global affairs, but in the US political civil war."
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