Eldorado Gold Corp (EGO) Call Volume Soars on Asset Sale

Eldorado Gold Corp (USA) (NYSE:EGO) is selling $600 million worth of assets in China

May 16, 2016 at 3:01 PM
facebook X logo linkedin

M&A Monday is running at full throttle, and while many on Wall Street are buying, mining firm Eldorado Gold Corp (USA)  (NYSE:EGO) is selling. Specifically, the company is letting go of all its remaining China-based assets, worth $600 million. Against this backdrop, EGO call options are trading at twice the expected intraday amount, with most of the activity taking place at the July 5 call.

While it's unclear exactly what traders are doing with these calls, there's a possibility they are being sold to close. In fact, a block of 5,000 May 5 calls crossed the tape shortly after noon -- when EGO was trading north of $5.

More broadly speaking, EGO calls have been absurdly popular at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) over the past two weeks. By the numbers, nearly 9,300 calls have been bought to open, compared to just 328 puts. What's more, the stock's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.10, meaning call open interest is 10 times that of put open interest, among options set to expire within three months. 

This seemingly optimistic set-up in the options pits makes sense considering Eldorado Gold Corp's (USA) (NYSE:EGO) technical performance in 2016. The shares are up 66% year-to-date, including today's 1.2% pop at $4.93. It seems analysts are beginning to eye some more upside for the shares, too, with Credit Suisse raising its price target on EGO to $6 from $4.50. 

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI