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Coeur Mining attracts large hedge

Mike Yamamoto (mike.yamamoto@optionmonster.com)

A large investor appears to be protecting gains in Coeur Mining, which has been rallying all month.

optionMONSTER's Depth Charge system detected the purchase of 10,000 September 5.50 puts for $0.80 at the same second on Friday. This is clearly a new position, as open interest in the strike was a mere 6 contracts before the trade occurred.

Long puts lock in the price where the stock can be sold no matter how far it might drop, gaining value in a selloff. The contracts can be purchased to make outright bearish bets, but Friday's puts may well have been bought as a protective hedge given the recent rise in Coeur's shares. (See our Education section)

CDE rose 1.58 percent to $5.78 on Friday and is up more than 20 percent since the beginning of April. Earlier in the week the silver miner broke out of a tight range in place for more than a month, rising above its 50-day moving average for the first time since early March.

Friday's put buying made up almost all of the option volume in Coeur, which was 12 times its daily average for the last month. Total puts outnumbered calls by more than 17 to 1.

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