Credit: Shutterstock photoThe bulls are discovering Barrick Gold, which has been snoozing at 23-year lows.
optionMONSTER's Heat Seeker program detected the purchase of 16,000 March 10 calls yesterday, most of which priced for $1.27. The volume was 50 times the strike's previous open interest, which indicates that new money was put to work.
Long calls set the price where investors can buy stock in the Toronto-based miner, which lets them profit from a rally while risking only a limited amount of capital. Yesterday's contracts were especially noteworthy because they were in the money with a high delta . They'll closely track movements in the underlying stock as a result. (See our Education section)
ABX was up about 3 percent when the options hit but worked higher and ended the session with a 9.22 percent gain to $11.37. The March 10 calls appreciated to $1.74. It was part of an ongoing stream of bullish activity in the industry, which yesterday also included Gold Fields and Eldorado Gold .
Overall option volume in Barrick was 6 times greater than average yesterday, with calls accounting for a bullish 79 percent of the total.
(A version of this post appeared on InsideOptions Pro yesterday.)
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
