OptionsHouse

Options Trading News

December 27, 2012  Thu 9:52 AM CT

GDXJ: SEE CHART GET CHAIN FIND STRATEGIES
A large call trade tops today's option activity in the Market Vectors Junior Gold Miners Fund even as it trades at five-month lows.

More than 18,000 GDXJ options have traded so far today--about twice its daily average--and almost all of the volume is in one trade.

optionMONSTER systems show that a trader sold 7,858 January 19.63 calls for $0.60 against open interest of more than 11,000 contracts. At the same time, he or she bought 7,858 February 19 calls for the ask price of $1.30 in volume that far exceeded that strike's open interest of 573, so this is a new position.

This appears to be a trader closing the January calls, which expire in three weeks, and rolling the position forward by a month. He or she is paying a premium to get more time and greater delta, or exposure to gains. (See our Education section)

The GDXJ is up fractionally on the day, continuing to trade at its lowest levels since the start of August. Shares had climbed up to resistance at $25 but have been trending lower since.
Share this article with your friends


Related Stories

GDXJ

Gold bulls set sights on junior miners

February 10, 2016

May call buyers are looking for the recent rebound in gold to continue lifting the Market Vectors Junior Gold Miners Fund.

OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »