Traders mine for gold in Eldorado
Traders want Eldorado Gold to live up to its name.
optionMONSTER's Heat Seeker monitoring system detected the purchase of 5,100 January 3 calls in the miner, whose name means "city of riches," for $0.50. Volume was more than triple open interest at the strike.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Coaching section)
EGO rose 1.87 percent to $3.26 in afternoon trading but is down 20 percent in the last three months. It's been falling along with other gold miners as interest-rate fears hammer precious metals . Today's activity reflects a belief the stock is due for a bounce.
Overall option volume was 8 times greater than average, according to the Heat Seeker. Calls outnumbered puts by more than 500 to 1.
More From optionMONSTER
