Harmony Gold has been bouncing, and the bulls are looking for the miner to keep climbing.
optionMONSTER's Heat Seeker scanners showed the purchase of more than 4,000 May 10 calls for $0.40 yesterday. Volume was more than 17 times previous open interest at the strike, so new money was definitely being put to work.
These long calls lock in the price where investors can buy shares in the South African gold miner. The options can generate significant leverage in the event of a rally because of their cheapness relative to the stock, but they will expire worthless if the shares don't move. (See our Education section)
HMY rose 2.86 percent to $8.64 yesterday and is up 9 percent in the last month. It's been rebounding after forming a double bottom around $7.45 in November and December, its lowest level in about four years.
Total option volume was 12 times greater than average in the session, with calls outnumbering puts by a bullish 38-to-1 ratio.
(A version of this post appeared on InsideOptions Pro yesterday.)
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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.
