What's behind put surge in Kinross Gold
Chris McKhann | [email protected]
KGC is in the middle of its recent range, up 1.58 percent to $8.35. The mining company hit a 52-week low of $7.11 a month ago but remains in a longer-term downtrend as shares trade more than 50 percent off their 52-week high above $18 reached September.
optionMONSTER's systems show that a trader bought 10,000 June 9 puts for $0.66, above the ask at the time, against open interest of 12,340. At the exact same time, he or she sold 10,000 July 9 puts for the bid price of $0.91 against open interest of just 319 contracts, indicating that this is a new position.
Given that the June options expire at the end of the week, this is likely a roll of a position. The unusual thing here is that this is a short-put position that is at the money.
The trader apparently doesn't not want to be assigned and required to buy shares at this point, which would occur with the short June puts if KGC remains below $9 at expiration. But he or she does want to continue to collect the volatility premium and is therefore rolling the short puts out a month to July. (See our Education section)
Total option volume in the name tops 21,000, compared to a daily average of 8,800.