The bears are prospecting for more downside in Ivanhoe Mines.
optionMONSTER's Depth Charge tracking system detected the purchase of about 9,000 December 20 puts for $2.70 and the sale of an equal number of September 22 puts for $2.10. Most of the volume in the September contracts was below open interest, which suggests that an existing position was rolled to the lower strike.
That means the investor anticipates more downside. He or she paid about $0.60 for the trade but is now positioned to make money at a lower level. (See our Education section)
IVN rose 0.73 percent to $20.82 yesterday but has lost a quarter of its value in the last six months. The company is developing its Oyu Tolgoi mine in Mongolia, though production is still about two years away.
The shares had a giant rally in 2009 and 2010 as the project received approval, but they have been topping out in the last six to eight months. The stock fell hard in early August along with other stocks, and yesterday's put activity suggests that it could have further downside.
More than 20,000 contracts traded overall in the name, which is about 10 times greater than average. Puts outnumbered calls by more than 50 to 1.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
