OptionsHouse

Options Trading News

December 29, 2011  Thu 10:19 AM CT

REE: SEE CHART GET CHAIN FIND STRATEGIES
One investor is calling a bottom for Rare Element Resources, which has been skidding lower all year.

optionMONSTER's Heat Seeker tracking program detected the purchase of about 1,500 January 2013 5 calls for $0.45 and $0.50 against open interest of 1,014 contracts. These options have a delta of 0.32, meaning that they will gain about $0.32 for every $1 that REE appreciates. (See our Education section)

The stock is down 0.93 percent to $3.18 today and has lost 80 percent of its value so far this year. It more than quadrupled in the second half of 2010 amid a surge of interest in so-called rare-earth materials but has surrendered all of those gains. The group took another hit yesterday after JP Morgan slashed its price target on rival Molycorp, predicting that increased Chinese exports will hurt pricing.

REE is now back to a level where it traded early last year, which could be leading some chart watchers to expect that it will find support and bounce. If they're right, today's long-term calls will let them profit from a gradual recovery over the course of 2012.

Overall option volume is 4 times greater than average in REE so far today.
Share this article with your friends


Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

View more education articles »