OptionsHouse

Options Trading News

December 28, 2012  Fri 2:14 AM CT

AEM: SEE CHART GET CHAIN FIND STRATEGIES
Agnico-Eagle Mines has fallen sharply with the price of gold in the last month, but one trader is counting on a floor beneath the stock.

optionMONSTER's tracking systems detected the sale of 1,500 April 45 puts in 5 minutes yesterday for an average price of $1.65. Open interest in the strike was just 71 contracts at the beginning of the day, indicating that this is a new position.

AEM rose 0.85 percent to $50.85 yesterday as the stock continues to face resistance at its 100-day moving average. The Toronto-based company, which produces gold, silver, and copper around the world, hit a 52-week high of $57.35 on Nov. 26 but has declined with the rest of the sector as precious metals have dropped.

Yesterday's put seller is looking for the stock to close above the $45 strike price at expiration in mid-April 2013. If the shares are below that level at that time, the trader faces the obligation to purchase shares at an effective price of $43.35 when the credit from the put sale is included. (See our Education section)
Share this article with your friends


Related Stories

AEM

Investor sees top in Agnico Eagle

April 23, 2015

A large trader is betting that the Toronto-based gold miner will rally but stay in within a range for most of this year.

Invest Like a Monster - San Diego: June 26-27

Premium Services

Education & Strategy

Vega

There is another Greek which measures the effects on an option's price buy changing the amount of extrinsic value in the option, and that Greek is Vega...

View more education articles »