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Call seller leaves AngloGold for dead

David Russell (david.russell@optionmonster.com)

The stock market is rallying to record levels, but gold miners such as AngloGold Ashanti are being left for dead.

optionMONSTER's tracking systems detected the sale of 7,000 October 17 calls, most of which priced for $1.72 to $1.75. A matching number of October 21s were bought at the same time for $0.50 to $0.53, but volume was below open interest.

This suggests the trader had previously sold the 21s, betting the South African company would stay below that level. Now that it has, he or she bought back the calls and rolled them down to the 17 strike, picking up an additional $1.22 in premium. The trader is also short the stock for $4 less, which increases the risk. (See our Education section)

AU fell 2.45 percent to $17.12 on Friday and has lost 45 percent of its value so far this year. Gold miners have been some of the weakest stocks in the market as bullion prices decline.

Total option volume was 5.5 times greater than average in the session.

Friday's short-call roll in AU came one day after a similar transaction in Harmony Gold , which saw heavy activity in the November contracts.

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