Call Buying Approaches Peak Levels on Harmony Gold Mining Co.

Call options have rarely been more popular on Harmony Gold Mining Co. (HMY), according to data from the International Securities Exchange (ISE). During the past five days, traders on the ISE have bought to open 7,325 calls on HMY, compared to just 8 puts. Meanwhile, the stock's 10-day ISE call/put volume ratio stands at 61.91, in the 94th annual percentile -- just six percentage points from a 52-week peak of optimism.

Elsewhere, short sellers are backing away from their bearish bets on HMY. Short interest fell by 12.8% during the most recent reporting period, and now accounts for a slim 0.9% of the stock's float.

Among near-term options, speculators have set their sights on HMY's January 2010 12.50 call. This option is home to peak call open interest of 41,633 contracts, and another 9,321 contracts have crossed the tape so far today, with the bulk of these trades taking place at the ask price. In other words, it looks as though traders are continuing to add new bullish bets at this popular strike.

With HMY trading near $10.38 this afternoon, these back-month calls are out of the money by a substantial margin. On the charts, the stock recently bounced off support in the $9.50 area -- but the shares have yet to break out of their long-term slump. A trendline connecting a series of lower highs since 2007 is looming in the $12 neighborhood, and this resistance level could thwart HMY's rally attempts during the short term.

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