A trader apparently believes that New Gold's upside potential will be limited.
optionMONSTER's monitoring systems detected the sale of 2,000 September 4 calls in one print for $0.95 yesterday. This is clearly a new position, as open interest in the strike was just 60 contracts before the trade occurred.
Short calls generate income and lock in the price where a stock must be sold. The trade is usually done in conjunction with long shares in a covered-call strategy, reflecting a belief that gains will be limited through expiration. (See our Education section)
NGD rose 0.84 percent to $4.82 yesterday and is up 11 percent in the last week. The gold miner reported bullish quarterly results on Tuesday.
Overall option volume was about average in NGD yesterday.
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