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August 19, 2013  Mon 12:20 PM CT

ABX: SEE CHART GET CHAIN FIND STRATEGIES
Mining companies have been coming back to life recently, and one large trade is looking for Barrick Gold to rise significantly in the long term.

A trader bought 10,780 January 2015 28 calls in a single print for $1.99 today, optionMONSTER's Heat Seeker tracking system shows. This is clearly a new position, as the volume is well above the strike's open interest of 4,791 contracts before the trade appeared.

These long calls lock in the price where the trader can buy the stock no matter how far it might rise by early 2015. The options could be sold earlier at a profit if premiums rise with a rally before then, but the contracts could expire worthless if shares remain below $28. (See our Education section)

ABX is up 0.67 percent to $19.46 in afternoon trading. The Toronto-based miner has risen steadily since falling to $15.53 on Aug. 7, but it is still a far cry from the levels above $42 where it traded last November. Credit Suisse raised its price target on the name to $22 from $20 last Wednesday.

Total option volume in Barrick is already twice its full-day average for the last month. Overall calls outnumber puts by more than 4 to 1.
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Timing the Trade

Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  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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