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

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.

Follow @Schaeffers

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released!