GDX, LNG Options – Unusual Trading Activity – September 29, 2014

| September 29, 2014 | 0 Comments

Unusual Trading VolumeThis week we’re taking a look at unusual options trading activity in Market Vectors Gold Miners ETF (GDX) and Cheniere Energy (LNG).

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:

Market Vectors Gold Miners ETF (GDX)

It looks like traders are hoping gold miners are going to rebound by the end of the week.

GDX, a popular India Gold Miners ETF, is currently trading for $21.94. The price is 9% above the 52-week low of $20.18 and is 22% below the 52-week high of $28.03.

Over 20,000 Weekly calls traded in GDX today, expiring at the end of the week. The calls have a strike price of 23 and cost $0.10 per contract. Open interest shows this to be opening action.

A trade like this is purely an upside gamble. When the options are this cheap and there’s so little time left, the only explanation is someone believes gold and gold miners have potential to spike this week from some kind of announcement or event.

Cheniere Energy (LNG)

At least one trader believes LNG Is going to hold onto to its huge gains through October.

LNG is trading for $80.97, up an impressive 86% so far this year. The shares are just 5% below the 52-week high of $85.00 and 149% above the 52-week low of $32.50.

A trader sold about 6,000 October 75 puts in one block. The puts traded for $1.00 per contract. Since then, another 1,500 or so options have traded at the strike, with all the action appearing to be opening.

Selling puts in this manner means the trader believes the stock price will remain above $75 by October expiration. The trade would still make money all the way down to $74. The trader also may be willing to get long shares at an entry point of $75.

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

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Category: Unusual Options Trading Activity

About the Author ()

Gordon Lewis is the Chief Investment Strategist and editor for the popular daily newsletter – Options Trading Research. He’s also editor of our dynamic theme-based options trading service, Advanced Options Adviser, and one of the key analysts behind the highly successful Options Trading Wire.