Andrea Kramer (akramer@sir-inc.com) Kinross Gold Corporation (KGC) has managed to buck the broad-market trend lower today, which could be the catalyst behind today's surge in optimistic options activity. So far today, the commodities concern has seen almost 9,800 calls change hands ? nearly triple its expected daily call volume, and about 14 times the number of KGC puts exchanged.
Nearly all of the volume has centered on the December 19 call, which has seen close to 7,200 contracts cross the tape on open interest of fewer than 2,000, pointing to newly opened positions. What's more, the majority of the near-the-money calls have traded at the ask price, confirming our suspicions of freshly purchased bullish bets.
From a broader sentiment standpoint, though, today's affinity for long calls runs counter to the growing trend among the options crowd. During the past couple of weeks on the International Securities Exchange (ISE), KGC has racked up a put/call volume ratio of 0.74, in the 80th annual percentile. In other words, options players on the ISE have bought to open KGC puts over calls at a much faster pace than usual during the past 10 sessions.
In the same vein, the security's Schaeffer's put/call open interest ratio (SOIR) is now docked at 0.74 ? only eight percentage points shy of an annual acme. Or, simply put, near-term options traders have been more pessimistically positioned toward KGC just 8% of the time during the past 12 months.
In afternoon trading, the shares of KGC have tacked on 0.5% to explore the $18.20 area.
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