Market News

January 5, 2017  Thu 8:16 AM CT

Traders are seeking a rebound in gold miners through a leveraged exchange-traded fund.

About 4,000 January 10.40 calls were purchased in the Direxion Daily Gold Miners Bull 3x Shares Fund at the same time yesterday. This represents fresh buying, as open interest in the strike was only 276 contracts before the session began.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

NUGT rose 1.86 percent to $8.76 yesterday but is down 52 percent in the last three months. The next quarterly report is estimated for pre-market hours on Dec. 31. The fund, which triples the performance of the NYSE Arca Gold Miners Index in either direction, .

Overall option volume was about average in NUGT. Calls outnumbered puts by a bullish 3-to-1 ratio.

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