Barrick Gold has shown signs of life recently after plunging for months, and short-term traders were looking for more gains.
More than 3,000 August 17.50 calls traded in a strong buying pattern as premiums rose from $0.18 to $0.56 on Friday, according to optionMONSTER's Heat Seeker system. The volume was well above the strike's open interest of just 727 contracts before the trades appeared, indicating that these are new positions.
The Heat Seeker also found call buying in several weekly contracts that expired at the end of Friday's session as traders bet on a last-minute pop. Many of those options paid off as premiums rose significantly throughout the day.
Such long calls lock in the price where a stock can be purchased no matter how high it might rise. Friday's traders were clearly looking for a quick move, and the August 17.50 contracts have only until the end of this week to perform or they will expire worthless. (See our Education section)
ABX ended Friday at $17.42, down from its intraday high of $17.72 but still up 1.87 percent on the session and breaking above its 50-day moving average. The Toronto-based company has taken a severe beating along with other gold miners, falling from above $42 in the last 10 months and slipping after its Aug. 1 quarterly report, but it bounced toward the end of last week as the precious metal put together a modest three-day winning streak.
The miner saw 86,798 options trade in all on Friday, triple its daily average for the last month.
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