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Question: writing gold covered-calls

May 16, 2013
Professor Antale Fekete refers all the time in his essays & interviews to writing "risk-free" gold covered-calls.

So after reading & hearing about this for years, I'm now researching online tutorials & watching videos about getting one's feet wet with call options.

One question that may seem obvious but which I'm still unclear on is, when someone writes a gold covered call, his asset that he's selling options to is exactly what -- an actual 100-ounce gold contract?

I'm asking because I want to start with some "paper trading" in gold and/or silver options, but I can't afford a gold (or a 1000-oz silver) COMEX futures contract.

How do gold call-traders do it? Is there an "E-mini" or "E-micro" for gold contracts that one can access or acquire and own to sell calls (and thus have them be covered)?

Also, I'd think one should be able do this on less $ with holdings of something like PHYS - the Sprott Physical Gold Trust ETV. (Except I just checked and it looks like PHYS doesn't have options.)

So, a possible plan for a newbie trader might be to (a) open my first trading account with OptionsHouse (because it's cheap and it allows trading in commodities), then (b) buy some [something] with that account, and then (c) devise a specific put- & call-writing/buying plan for selling options against my [something] holding.

(And of course to make sure I know what hell I'm doing before I put any actual dough on the line.)

But my main question is, typically what asset(s) exactly are gold & silver covered-call writers selling options to?
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