Allied Nevada Gold gapped down last week after a huge rally, and
now traders are calling a top.
optionMONSTER's tracking systems detected the sale about 3,400
September 20 calls against open interest of 620 contracts. Most of
the volume priced for $2.26 to $2.50.
The gold miner fell 1.34 percent to $19.19 yesterday. ANV had
topped out at $22.92 on May 12, the culmination of a 67 percent
rally over the preceding three months. It failed to hold its gains
that session and has been falling since.
It isn't clear why the company, which went public in May 2007, has
been rallying more than other gold miners. It traded as low as
$1.68 in October 2008.
The calls were probably sold by an investor looking to earn income
from a position in the stock and to lock in an exit price if it
continues to rally. The strategy will play out in his or her favor
if ANV closes at or below about $22.50 on expiration.
Overall options volume in the name was 16 times greater than
(Chart courtesy of tradeMONSTER)
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