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Gold has run up and is now facing a lot of overhead resistance. Inflation is increasing worldwide, and that’s one reason why gold has seen some buying recently. However, the big reason gold is rising is the uncertainty of the U.S. election, which is causing investors to move into defensive assets.

With the election almost here, I’ve been looking for a bearish position on SPDR Gold Trust (ETF) (NYSEARCA:GLD) to set us up for after the results are in and that uncertainty has passed. Now, you could simply buy puts — but I prefer to play it more cheaply, with a ratio put debit spread:

Using a spread order, buy to open 1 GLD Dec. 16th $123 put and sell to open 2 GLD Dec. 16th $119 puts for a net debit of about $0.65.

A ratio debit spread is simply a way to lower the cost of buying options, as the two option(s) that you sell to open (short) helps offset the cost of the option that you buy to open. Therefore, this ratio put debit spread is a way to lower the cost of establishing a bearish put option trade. Many brokers will require the use of margin and/or a set amount of reserved capital and/or a margin account to execute a debit spread; contact your broker directly for specific requirements.

Because you are short a naked put in this ratio put debit spread, the risk is that you could be obligated to buy 100 shares of GLD at the $119 strike price for every 1 contract that you are short of the GLD Dec. 16th $119 puts. So, this is inherently a higher risk play, and you’ll want to avoid that risk by exiting if GLD gets down to $119.

Ken Trester is editor of the popular Maximum Options program. Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.