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.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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