$GOLD bulls mine profits

Option traders have nearly tripled their money on upside positions in Barrick Gold (GOLD).

Back on Feb. 20, Investitute’s tracking systems detected the purchase of 9,700 September $14 calls for $1.33 and $1.34 as part of a bullish spread with shares at $13.83. This was clearly a new position, as open interest in the strike was only 531 contracts before that session began.

Those calls traded for as much as $3.76 today, about 3 times their purchase prices. The stock rallied 28.13% in the same time period, a large move but nowhere near that of its options on a relative basis.

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 is up 0.89% to $18.12 in late-day trading. The miner missed quarterly estimates yesterday but has rallied along with other names in the space as the price ofo precious metals have risen.