Big trade sticks with gold miners
A large investor is looking for the Market Vectors Gold Miners Fund to pop in the next week.
optionMONSTER's Heat Seeker system detected the sale of 19,894 Weekly 13.50 calls expiring today for $0.25 and the purchase of 19,894 Weekly 14 calls expiring next Friday for $0.27. Volume was below open interest in the lower strike, indicating that a long position was rolled forward.
The trader is closing the expiring 13.50 contracts and opening a new position at the higher strike one week later for a net cost of $0.02. Long calls lock in the price where investors can buy a stock, which lets them position for a rally with limited capital. (See our Education section)
GDX is up 2.39 percent to 13.69 in early trade but is down 34 percent in the last month. The exchange-traded fund has been hammered with the bear market in gold and has lost half its market valuation in the last year.
Total GDX calls are outnumbering puts by more than 30 to 1 so far.
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