OptionsHouse

Options Trading News

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.
Share this article with your friends


Related Stories

GDX

Are gold miners poised for a pullback?

August 18, 2016

The Market Vectors Gold Miners Fund is up 29 percent in the last three months, but traders apparently believe that it may be due for a breather.

GDX

Gold miners fund gets vote of confidence

August 11, 2016

The Market Vectors Gold Miners Fund has rallied 26 percent in the last three months, and traders apparently believe that it is on solid ground.

GDX

Cheap bets on rally in gold miners fund

August 1, 2016

Call buyers are looking for even more gains in the Market Vectors Gold Miners Fund, which has already jumped 23 percent in the last three months.

OptionsHouse

Premium Services

Education & Strategy

Dissecting a big institutional trade

This week's column will study a recent call ratio spread. We're not recommending using this strategy because it has potentially huge risk. But we can learn from this different use of options by a large institutional investor.

View more education articles »