Rebound seen for Northern Dynasty

Shutterstock photo

Northern Dynasty Minerals is basing after a giant pullback, and one investor is looking for a measured rebound.

optionMONSTER's tracking systems detected the sale of more than 9,800 November 15 calls for $0.45 and $0.40, and the sale of more than 7,500 November 20 calls for $0.10. Shares fell almost immediately, likely because the dealer who bought the calls needed to hedge their resulting long position in the Canadian mining stock.

NAK ended the session down 0.77 percent at $10.37 and has been building support around its current level after peaking over $21 in February. The company co-owns Alaska's giant Pebble deposit along with Anglo American, though it remains several quarters away from generating revenue.

Yesterday's calls were probably sold by investors who own the shares and are looking to receive some income while they wait for a rally. In return for the cash now, they surrender the right to upside above the strike prices. (See our Education section)

The trade pushed overall option volume in NAK to 30 times greater than average.

Disclosure: I own NAK shares.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing , Options

More from optionMONSTER




Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by