Bearish spread hits gold miners
Chris McKhann | firstname.lastname@example.org
optionMONSTER systems show that a trader sold 5,000 April 26 calls for the bid price of $1.93 and bought 5,000 April 29 calls on the ask for $0.57. The volume is above previous open interest in each strike, so this is a new credit spread.
The trader collects $1.36, which will be kept as profit if the GDX is below $26 upon expiration in mid-April. The maximum amount at risk is $1.64, which would be lost if the stock is above $29. (See our Education section)
The GDX finished yesterday at $27.63, a penny off its session high and its highest close since mid-September. The exchange-traded fund was at a five-year low of $20.24 at the end of 2013.