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Dan Nathan Sees Unusual Options Activity In Market Vectors Gold Miners ETF

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On CNBC's Options Action, Dan Nathan said that Market Vectors Gold Miners ETF (NYSE: GDX) had three times average daily call options volume on Tuesday. He added that calls outnumbered puts three to one.

Nathan noticed a big trade when the stock was trading at $19.70. Someone sold a total of 39,000 contracts of the January 2016, 12 and 13 strike puts, bought 39,000 contracts of the January 2016 20 strike call and sold 39,000 contracts of the January 2016 26 call. The trader paid the whole structure around $1.25.

The stock has bounced recently from its lows and Nathan said that a long period of decline increased implied volatility in the name. The implied volatility is still high and that is the reason why the trader decided to sell options to make a long-term bullish bet, said Nathan.

 

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