Bulls chase as NovaGold runs
NovaGold has been running, and the bulls are giving chase.
optionMONSTER's Heat Seeker monitoring program detected the purchase of almost 4,500 June 3.50 calls for $0.85 to $0.90. Volume was more than 6 times previous open interest at the strike, indicating that new positions were initiated.
These long calls lock in the price where a stock can be bought, letting investors profit from a rally at low cost. Today's transaction is noteworthy because it is using in-the-money contracts, which will closely track movements in the underlying shares. (See our Education section)
While the broader gold-mining industry is up 19 percent in the last three months, NG has thoroughly outperformed its peers with a 73 percent over that same period. It's up another 1.74 percent to $4.10 in afternoon trading today.
Total option volume in NovaGold is more than triple the daily average, with calls outnumbering puts by a bullish 58-to-1 ratio.