Gold miners have plummeted in the last month, with the Market Vectors Gold Miners ETF GDX – NYSE dropping 15.4% since early November.
Eventually a bottom will be established and these stocks will bounce, and someone just made a hefty bet it’s about to happen soon.
[On Friday], 35,000 GDX January 20 calls were purchased for $0.63 each.
Bottarelli Research Translation: These options contracts may be cheap, but buying 35,000 at once adds up quick. In this case, it amounts to $2.2 million in pure option premium. With a break-even price at expiration of $20.63, GDX needs to increase 6.7% within the next month for this trade to pay off. If GDX can recover just a small portion of its losses, this trader is positioned to make $3.5 million for every $1 GDX rises above $20.63.
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