Trade sees Allied Nevada hitting top

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Allied Nevada Gold gapped down last week after a huge rally, and now traders are calling a top.

ANV Chart 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 average yesterday.

(Chart courtesy of tradeMONSTER)



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

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This article appears in: Investing , Options

Referenced Stocks: ANV

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