Calls already shining $GOLD

It took just one week for option traders to double their money in Barrick Gold.

On March 4, Investitute’s tracking systems found that 4,500 May $13 calls were bought in one print for $0.41 with shares at $12.21. This was clearly a new position, as volume was well above the strike’s previous open interest of 2,204 contracts.

Those calls sold for as much as $0.98 today, more than twice their purchase price. The stock rose 9.75% in the same time frame, showing how quickly options can far outpace gains in their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

GOLD was up 2.09% to $13.20 today. The gold miner dropped its hostile takeover bid for rival Newmont Mining (NEM) today, opting instead for a joint venture.