Goldcorp gets a show of support
Mike Yamamoto | [email protected]
optionMONSTER's tracking systems detected the sale of 3,000 April 25 puts in one print for the bid price of $3.10 yesterday. This is clearly a new position, as open interest in the strike was just 269 contracts before the trade appeared.
The put seller will keep that $3.10 credit as profit if GG stays above $25 for the next seven months. If it drops below that level, he or she will be on the hook to buy shares at an effective price of $21.90 once the credit is included. Traders sometimes sell puts this way in hopes of getting a pullback so that they can pick up stock at a discount to existing levels. (See our Education section)
GG slipped 1.34 percent to $25.68 yesterday and is down almost 30 percent this year. The stock tried to rebound in August but pulled back after hitting resistance at its 200-day average near $32 and is now having trouble getting back above the 50-day line.
The Canadian mining company is scheduled to release third-quarter results on the morning of Oct. 24.
Total option volume in Goldcorp topped 11,000 contracts yesterday, more than 50 percent higher than its daily average for the last month.