Bullish Speculation Ramps Up On Barrick Gold Corporation (USA) (ABX)

Barrick Gold Corporation (USA) hasn't closed a week north of $13 since late October

Digital Content Group
Dec 1, 2014 at 1:32 PM
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Barrick Gold Corporation (USA) (NYSE:ABX) and other precious metals producers are bucking the broad-market trend lower this afternoon, as Moody's downgrade of Japan's credit rating drives traders to safe-haven investments. At last check, ABX was up 2.7% at $12.20. Meanwhile, the stock's calls are crossing the tape at a 22% mark-up to the usual intraday rate.

Diving into the details, the most active ABX call is the weekly 12/12 13 strike, where nearly 2,600 contracts have changed hands. Implied volatility is edging higher, volume outstrips open interest, and 90% of the volume has transpired at the ask price, collectively indicating buy-to-open activity -- a theory echoed by data from the International Securities Exchange (ISE).

These traders are looking for Barrick Gold Corporation (USA) (NYSE:ABX) to topple $13 by next Friday's close, when the series expires. The equity, which is down roughly 30% year-to-date, hasn't ended a week north of that mark since Oct. 24. As such, delta on the call is a slim 0.18, signifying an 18% chance the option will expire in the money.

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