Options Trading News

September 27, 2013  Fri 3:47 AM CT

Goldcorp has fallen hard with other miners this year, but one trader apparently believes that further losses will be limited.

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.
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