$GDXJ calls shine

Bullish option traders have already tripled their money on longer-term call strategies in the VanEck Vectors Junior Gold Miners Fund (GDXJ).

Just over a month ago on Mar. 13, Market Rebellion’s Unusual Activity Service detected the purchase of 5,000 January $40 calls, as part of a bullish spread, for $2.50 with shares at $25.87. This was clearly fresh buying, as open interest for the contract was only 3,071 before that session began.

Those calls traded for as much as $9.07 today, more than 3.5 times their purchase prices. The stock rose 59.06% in the same time, a large move but nowhere near that of its options.

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.

GDXJ ended the session unchanged at$38.53 after trading as high as $41.41 earlier. Gold miners have rallied since their Mar. 13 low, to levels not seen since the end of February along with the price of gold which hit a fresh 52-Week high today.