Options Trading News

July 10, 2013  Wed 3:47 AM CT

Coeur Mining is at its lowest level in four years, and one trader is apparently betting that shares will plunge again in the next six weeks.

optionMONSTER's Depth Charge system detected the purchase of 2,000 August 6 puts for $0.05 yesterday. This is a new position, as there was no open interest in the strike before the trade appeared.

CDE slipped 0.6 percent to close at $11.68 after dipping to $11.30 earlier in the session, its lowest intraday price since July 2009. The silver and gold miner gapped down from above $30 last November and has declined ever since along with the price of precious metals.

These puts lock in the price where traders can sell the stock no matter how far it might fall. The trader appears to be making a cheap bet that CDE will collapse by mid-August, but the options will expire worthless if the stock remains above the $6 strike price. (See our Education section)

Total option volume in the name was 4,432 contracts yesterday, triple its daily average for the last month. Puts outpaced calls by 1.5 to 1.

The company has not yet scheduled its next earnings report but will present at several industry events in coming months. Those include the Jefferies Industrials Conference on Aug. 15, the Denver Gold Forum on Sept. 22, and the Silver Summit on Oct. 24.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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