CFX, AUY Options – Unusual Trading Activity – June 2, 2014
Editor’s Note: After today, our office will be closed the rest of the week for summer break. You will receive your next article on Monday, June 9th.
This week we’re taking a look at unusual options trading activity in Colfax (CFX) and Yamana Gold (AUY).
As many of you know, unusual options volume can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.
This is something professional options traders pay a lot of attention to, and for good reason… Unusual options activity can “tip off” big moves in a stock, either up or down.
So let’s take a look at some ‘interesting’ activity that caught our eye this week:
Colfax (CFX)
Diversified manufacturing and engineering company Colfax is seeing neutral to slightly bullish options action early this week.
CFX is currently trading for $74.10. The price is 53% above the 52-week low of $48.56 and is just 1% below the previous 52-week high of $75.18.
Traders sold a block of 3,000 July 67.50 puts for $0.50. Open interest was basically nothing before the trade, so it’s definitely an opening position.
The trade suggests CFX will hold over $67.50 by July expiration. The put sellers will keep the entire premium as long as the share price holds above the strike price. Given the relatively non-volatile nature of the stock and the support at $67.50, this trade seems like a good bet.
Yamana Gold (AUY)
At least one trader thinks gold prices may have a floor just below these levels.
AUY, a fairly large gold miner, is trading for $7.36. The shares are 40% below the 52-week high of $12.30 and 5% above the 52-week low of $7.02.
Despite the steady decline in gold-related companies in recent months, a trader believes $7 is the floor for how far AUY will fall – at least until next January. The trader sold 3,500 January 7 puts for $0.65.
The put seller will hold onto the entire premium amount should the stock close above $7 by January expiration. That amounts to $227,500 in premium collected as long at the share price doesn’t set a new 52-week low in a little over six months.
More Options Ideas…
That wraps up this week’s unusual options trading and volume…
Keep in mind, there’s a lot more unusual options activity going on than what we discuss here.
We just try to bring you what we feel are the most significant ones– and the ones you might actually be able to make some money on!
So keep an eye on your email inbox… we have a lot more options trading ideas coming your way!
Yours in Profit,
Gordon Lewis
Category: Unusual Options Trading Activity
