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Option Brief: It's a busy week on the earnings front, and mining magnate Barrick Gold Corporation (USA) (NYSE:ABX) will release its third-quarter results before tomorrow's open. Ahead of this scheduled event, option players are scooping up calls over puts at a 3-to-1 margin today.
Of the 39,000 calls that have crossed the tape thus far, nearly 7,900 have done so at the weekly 11/1 21-strike call. One large and several mid-sized blocks have traded at the bid price here, and could represent shareholders initiating a covered-call strategy ahead of earnings.
However, the majority of the contracts have gone off on the ask side, and data from the International Securities Exchange (ISE) confirms a portion of the day's activity is of the buy-to-open kind. Considering ABX has not traded north of $21 on an intraday basis since Aug. 27, delta for the call registers at 0.16, meaning the options market is currently giving the contract a 16% chance for an in-the-money finish.
Barrick Gold Corporation (USA) (NYSE:ABX) does not have a great history on the earnings stage, and has fallen short of analysts' bottom-line expectations in four of the past seven quarters. On the charts, the stock has followed up these quarterly reports by shedding an average of 0.6% in the subsequent session. For Barrick Gold's third quarter, Wall Street is calling for a profit of 50 cents per share -- a 41% decline from its year-ago earnings.
Heading into the final hour of today's trading, ABX is up 0.4% to trade at $19.84.