Options Trading News

November 20, 2013  Wed 11:07 AM CT

A large trade is looking for more volatility in the Market Vectors Gold Miners Fund.

optionMONSTER's Heat Seeker system detected the purchase of 25,000 March 30 GDX calls for the ask price of $0.30. This is clearly a new position, as the volume is 5 times higher than the previous open interest in the strike.

Seconds later, the largest block of GDX stock traded in a single print of 350,000 shares that was sold for $23.3571. Combined with the calls, this creates a position that is exactly delta-neutral, meaning that the trader is looking for a big move up or down and/or for volatility to be greater than that implied by the options. (See our Education section)

The GDX is down 1.1 percent to $23.43. The $23 level has been support going back to the stock's 52-week low of $22.21 set in June. The exchange-traded fund did get above $31 in late August.
Share this article with your friends


Premium Services

Education & Strategy

Using puts to BUY stock

Puts are an options contract that gives buyers the right to sell their stock for a set price on or before a future date. However, puts can also be an effective way to BUY stock.

View more education articles »