Options Trading News

April 4, 2014  Fri 11:25 AM CT

At least one trader apparently believes that Eldorado Gold will hold today's bounce.

optionMONSTER systems detected the sale of 5,500 July 6 puts, with blocks of 2,195 and 1,762 going for $0.46. This is clearly a new position, as the volume is well above the strike's previous open interest of 1,248 contracts.

The put seller sees EGO holding above $6 through expiration in mid-July. If the stock falls below that strike price, the trader faces the obligation to buy shares at that level. (See our Education section)

EGO is up 4.41 percent to $6.03 in midday trading. The mining company traded up to $7.50 in mid-March but down at support around $5.60 through most of last week.

Total option volume in EGO has already surpassed 8,400 contracts, more than double its full-session average for the last month.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. 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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