Royal Gold is bouncing today, but one investor remains a seller.
optionMONSTER's tracking programs detected the purchase of 2,273
July 77.50 calls for $0.50 and the sale of an equal number of
October 70 calls by $3.30. Volume was below open interest in July
but not October, which suggests that an existing position was
rolled from one strike to the other.
The trade is interesting because the investor lowered by $7.50 the
level at which he or she must sell shares in the Denver-based
company, which owns royalty rights on mining properties. The trader
also extended the commitment by three months while collecting a
credit of $2.80.
RGLD is up 5.41 percent to $63.88 in afternoon trading but is down
more than 20 percent in the last six months. Gold stocks have been
pounded recently as slow inflation and weak global growth cause
investors to shun precious metals.
Today's trader probably owns shares in RGLD and had previously sold
the July 77.50s as part of a
strategy. By rolling the position lower, the call seller is
essentially lowering the outlook for the stock. (See our
Overall option volume is more than quadruple the daily average so
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