Short-Term Gold Bug Raises the Stakes on Red-Hot JNUG

Volume on Direxion Daily Junior Gold Miners Index Bull 3x Shares (JNUG) call options hit an annual high today

Jan 9, 2017 at 3:33 PM
facebook X logo linkedin

The Direxion Daily Junior Gold Miners Index Bull 3x Shares (JNUG) is soaring today, up 6.4% at $8.06, as gold rallies ahead this week's raft of Fed speeches and Donald Trump's Jan. 20 presidential inauguration. This has traders streaming into the exchange-traded fund's (ETF) options pits, with 38,489 JNUG calls on the tape -- triple the usual intraday rate, and fresh off an annual high.

The day's biggest trade occurred around noon, when matching blocks of 10,000 contracts cross at the weekly 1/13 7- and 9-strike calls. According to Trade-Alert, one bullish bettor is rolling her position up, selling to close the lower-strike calls and buying to open the higher -- anticipating JNUG will topple $9 by week's end, when the series expires.

Call buying has been all the rage of late. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 4.09 JNUG calls for every put -- a ratio that ranks in the elevated 89th annual percentile. As a result, the ETF's Schaeffer's put/call open interest ratio (SOIR) is down to 0.49 -- in the bottom quartile of its annual range, with short-term calls doubling puts.

Now is an expensive time to purchase premium on JNUG options in the front-month series, though. The shares sport a sky-high Schaeffer's Volatility Index (SVI) of 658%, outstripping all but 12% of readings recorded in the past year. In other words, lofty volatility expectations are currently being priced into short-term strikes.

Technically speaking, the Direxion Daily Junior Gold Miners Index Bull 3x Shares (JNUG) has fallen on hard times, relative to its August peak above $33 -- with the broader struggle in gold resulting in a dramatic sentiment shift for the malleable metal. However, JNUG has been making a comeback since consolidating around $4 in late December, and is on track for its fourth consecutive daily finish above its 40-day moving average.

Schaeffer's Expiration Week Countdown subscribers just made 165% GAINS on Direxion Daily Junior Gold Miners Index Bull 3x Shares (JNUG) calls! Sign up now for a trial subscription.


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 calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI