Silver miner Coeur d'Alene Mines has been building support, and
yesterday the bulls stepped in with a long-term trade.
optionMONSTER's Heat Seeker tracking system detected the purchase
of about 3,500 January 2014 37 calls, most of which priced for
$1.30. Volume was 14 times open interest at the strike.
lock in the price where investors can buy shares, so they can
generate nice leverage in the event of a rally. But they will
expire worthless if the stock doesn't move. (See our
CDE rose 1.26 percent to $24.10 yesterday. This means that those
calls are way
out of the money
, so the stock needs to make a substantial move in the next year
for the trade to pay off.
The stock has bounced several times at its 200-day moving average
around $22. The average was also a key level in late August, so
some chart watchers may want to get long around that price.
In addition, CDE climbed last Thursday even though the price of
silver tumbled almost 4 percent. Such price action suggests that
buyers are targeting the shares.
Total option volume was 5 times greater than average yesterday,
with calls outnumbering puts by a bullish 8-to-1 ratio.
I own CDE shares.
(A version of this post appeared on
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