Put selling topped the options trade in Kinross Gold at the end of last week.
optionMONSTER systems show that more than 54,000 KGC options traded on Friday, compared to the daily average of less than 9,000 over the last month. A transaction in the January 2015 5 puts dominated the activity, with almost 18,000 trading against open interest of 7,132 contracts. A trader was selling those in size, with the big block of 13,600 crossing at the $1.02 bid price.
He or she is betting that KGC will remain $5 over the long term. They collect a credit in exchange for the risk of buying stock on a drop below that level. If that does happen and they're assigned shares, the income received would lower their entry price to $3.98.
KGC finished down 0.01 to $5.50. It bottomed at $4.53 in June and has been recently working higher along with the price of gold.
More From optionMONSTER
- What's behind put selling in Infinity
- Position adjusted in Ultra Petroleum
- Markets face Beige Book, Syria news
- Investment & Company Information
- Kinross Gold