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March 14, 2014  Fri 2:45 AM CT

GDX: SEE CHART GET CHAIN FIND STRATEGIES
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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Education & Strategy

Gamma

As we continue to discuss the Greeks, we come to the first of the strike based Greeks called Gamma. Gamma is known as the second derivative, while delta is the first.

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