First they were buying calls in Buenaventura, and now they're
optionMONSTER's tracking systems detected a surge of activity in
the September 36 puts, most which priced at the $1.50 bid price.
More than 2,100 changed hands against open interest of just 24
Those investors are now obligated to buy BVN shares for $36 if they
close below that level on expiration. But above $36, they will keep
the $1.50 and the options will expire worthless. Selling puts is a
common strategy when investors like a stock but don't want to buy
, there was also
in the June 42 calls for $0.20. Those same contracts more than
doubled yesterday as the stock rallied.
BVN is off 1.49 percent to $40.20 this afternoon, trading in line
with the rest of the sector. The Peruvian gold miner has mostly
been grinding sideways for the last year while most other
precious-metals companies have declined.
also stands to benefits the fact that implied volatility in the
name is 37 percent--versus its 27 percent historical volatility.
That suggests premiums are higher than they should be, so it makes
sense to sell puts. (See our
Overall option volume in BVN is triple the daily average so far
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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