New Gold bulls come back for more
Traders are snapping up calls in New Gold for the second day in a row.
optionMONSTER's tracking program detected the purchase of 8,500 July 4.50 calls mostly for $0.25 to $0.30 today. Volume was more than 6 times the strike's open interest, showing that these are new positions, and follows buying in the July 3.50 calls yesterday and on June 16 .
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)
NGD is up 5.94 percent to $4.64 in afternoon trading and is up 17 percent in the last month. The gold miner is expected to report earnings after the close on July 28, about two weeks after today's long calls expire.
Overall option volume in the name is 5 times greater than average today. Calls outnumbered puts by a bullish 49-to-1 ratio.
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