Kinross Gold stopped the bleeding?

Chris McKhann (chris.mckhann@optionmonster.com)

Kinross Gold is trading at 12-year lows, but one large put sale is betting that current levels will hold through the end of 2014.

A block of 12,000 January 4 puts was sold for the bid price of $0.50 yesterday. This is clearly a new position, as open interest in the strike was just 1,054 contracts before the trade appeared.  

The put selling is a bet that KGC will hold up above $4 for the rest of the year. Given how close the stock is to the strike price, the seller may be looking to buy shares if they fall below that level.

Investors sometimes sell puts this way in hopes of picking up shares at a discount on a pullback. In this case, the effective purchase price would be $3.50 once the $0.50 credit is subtracted. (See our Education section)

KGC was down 1.46 percent to close at $4.06 yesterday after falling to $3.98 in previous session, its lowest intraday price since July 2002. The gold and silver miner was trading well above $5 only six weeks ago.

Yesterday's call sale made up much of KGC's total option volume, which was 4 times its daily average for the last month.

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