One investor is keeping the faith in U.S. Gold.
optionMONSTER's Heat Seeker tracking system detected the purchase of 2,300 May 5 calls for $0.57 and the sale of an equal number February 5 calls for $0.25. Volume was below open interest in February but not in May, which suggests that an existing long position was rolled forward.
The trade cost $0.32 and gives the investor an additional three months to profit from a rally in the Colorado-based miner. Adjusting the position now will protect it from time decay and increases its delta , so the calls will track movements in the shares more closely. However, the trader is still at risk of losing everything if UXG fails to rally. (See our Education section)
The stock is downl 4.9 percent to $3.88 today and has lost more than half its value so far this year.
Overall option volume in the stock is 6 times greater than average, with not a single put trading yet, according to the Heat Seeker.
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