Goldcorp traders stay on bullion train
David Russell | [email protected]
optionMONSTER's tracking programs detected the purchase of 2,450 October 37 calls for $9.10 and the sale of an equal number of January 47 calls for $3.20. Volume was below open interest in the 37s but not the 47s, which indicates that an existing position was rolled from one strike to the other.
The investor probably owns shares in the Canadian gold miner and had previously sold the October contracts to earn income. Now that the stock has rallied, he or she adjusted to the higher strike. In return for the $5.90 debit, the trader now has a right to collect an additional $10 on their holding in the stock.
GG is off 0.11 percent to $46.15 this afternoon but is up 20 percent in the last month. It's been ripping higher along with other gold miners as easy-money policies by the central banks around the world draw investors back to precious metals.
Today's short-call roll also extended the bet on GG by three months. Selling longer-dated contracts lets investors earn income from their greater time value while reducing volatility. (See our Education section)