A generic image of a smartphone
Markets

Trader sees Kinross on solid ground

Kinross Gold is back to a potential support level, and one investor is confident that it will hold its ground.

optionMONSTER's monitoring systems detected the sale of about 10,000 January 10 puts for $0.25 against open interest of 1,422 contracts. The trade reflects a belief that downside is limited in the Toronto-based miner, in which case time decay will erase the value of the contracts and the investor will pocket the premium earned.

KGC is down 2.53 percent to $14.64 in afternoon trading. Shares are attempting to hold the $14-$15 area that has been the lower end of their price range since April 2009.

Gold mining had been one of the stronger segments in the market until last week , when precious metals found themselves in sellers' crosshairs. There was also put selling in silver producer Coeur d'Alene Mines earlier today .

Both trades are examples of market-neutral strategies that stand to benefit from the passage of time rather than a directional move. In the case of KGC, they can withstand a drop of about 30 percent without losing money. (See our Education section)

Disclosure: I own CDE shares.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

KGC

Other Topics

Options