Traders are betting that shares of Kinross Gold will pop before the mining company reports earnings results in about a month.
optionMONSTER's Heat Seeker system showed strong buying patterns in the February 9 and 10 calls, which saw more than 37,000 and 15,000 contracts trade respectively for average prices of $0.83 and $0.34. Volumes were above the previous open interest at each strike, indicating that these are new positions.
KGC rose 2.65 percent to $9.69 yesterday as the stock continues to trade in a tight range with its 200-day moving average as support. The Toronto-based miner is scheduled to report fourth-quarter and full-year results in the pre-market on Feb. 14, a day before the February options expire.
The calls bought yesterday, which lock in the price where traders can buy shares, are looking for KGC to make moderate gains by that time. But the options will rapidly lose value as expiration approaches if the stock doesn't rise. (See our Education section)
The trades pushed overall option volume in the name past 69,900 contracts, compared with a daily average of just 5,005 in the last month. Overall calls at all strikes outnumbered puts by nearly 14 to 1, a reflection of the session's bullish sentiment.
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