Options Trading News

September 25, 2013  Wed 3:47 AM CT

A trader is extending a downside position in Hecla Mining.

optionMONSTER's Depth Charge system yesterday detected the sale of 3,000 January 3 puts for $0.25 and the purchase of 3,000 March 3 puts for $0.36. Volume was below open interest in the January strike but above it in the March contracts, indicating that a position is being rolled forward.

The trader is paying a net $0.11 to get another two months for the position to work. The March puts could be a hedge on a long position or an outright bearish bet. Either way, they will expire worthless if shares remain above the $3 strike price. (See our Education section)

HL slipped 0.62 percent, or $0.02, to close at $3.20 yesterday after facing resistance at its 50-day moving average. The silver and gold producer climbed after reporting second-quarter results on Aug. 8 and peaked at the $4 level later that month but then gave up most of those gains.

The company is scheduled to make two industry presentations next month, at the Deutsche Bank Leveraged Finance Conference on Oct. 1 and Cambridge House International's Silver Summit on Oct. 24.

Hecla's total option volume topped 14,300 contracts yesterday, more than triple its daily average for the last month.
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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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