Options Trading News

March 14, 2014  Fri 2:45 AM CT

A large call spread in the Market Vectors Gold Miners Fund appears to be bearish.

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.
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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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