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<p>[QUOTE=&quot;desertgem, post: 1317458, member: 15199&quot;]No, the settlement of a CME Precious metal future <span style="color: #800000">option </span>is listed as &quot;financial&quot;, and generally means cash. The option description has it as the &quot;cash difference&quot; between the transaction pricing and the settlement pricing. </p><p><a href="http://www.cmegroup.com/trading/metals/precious/gold_contractSpecs_options.html#prodType=STO" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://www.cmegroup.com/trading/metals/precious/gold_contractSpecs_options.html#prodType=STO" rel="nofollow">http://www.cmegroup.com/trading/metals/precious/gold_contractSpecs_options.html#prodType=STO</a> </p><p><br /></p><p>If you are buying the same as Gold<span style="color: #800000"> future</span> ( not options), the settlement is physical, but the cost/payment ) ( long/short) is the full determined price of the&nbsp; 100 Toz.&nbsp; You can trade it if the metal takes an upswing and make money, or sell after a down swing and lose, whereas with the options you can protect your position with straddles or other types of option spreads.</p><p>&nbsp; </p><p><a href="http://www.cmegroup.com/trading/metals/precious/gold_contract_specifications.html" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://www.cmegroup.com/trading/metals/precious/gold_contract_specifications.html" rel="nofollow">http://www.cmegroup.com/trading/metals/precious/gold_contract_specifications.html</a></p><p><br /></p><p>The above is for CME members/associates, so common folks would be doing it through a broker associated with CME. With a margin account a person could use it to buy a future for delivery, but the brokerage will require that the price difference between the margin and the full price be in the account long&nbsp; before the CME expiration deadline, so they can forcibly close out the margin transaction if the customer wont pay. If they have correctly required collateral for the margin deal, they will be OK. Many handle the option in house until the full money comes in and then buys the CME future contract for the customer + charges.</p><p><br /></p><p>If I was the owner of a very large jewelry supplier, I could be a member of the CME, buy options for long term hedging, and as I see my needs coming, buy a physical &quot;future Delivery&quot; contract or keep rolling over my option hedges. As an investor, options and cash delivery seem the best way.IMO.</p><p><br /></p><p>Jim[/QUOTE]</p><p><br /></p>

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