Sentiment remains positive on Ivanhoe
David Russell | firstname.lastname@example.org
Shares in the company, which owns rights to a giant mineral deposit in Mongolia, are down by more than half since early December but have been holding their ground in the last two weeks. optionMONSTER has cited repeated call buying during that time.
Yesterday an investor sold almost 11,000 July 9 puts, most of which priced for $0.78. If IVN remains above $9 by expiration, the puts will expire worthless and he or she will keep the credit as profit. Volume was more than 190 times previous open interest in the strike.
Selling puts is a common strategy when someone believes that a stock is near its bottom, meaning that it will fall no further. If they're right, the simple process of time decay makes them money. (See our Education section for other market-neutral trades.)
IVN rose 5.83 percent to close at $9.81. The put selling pushed total option volume in the name to 6 times greater than average.