$NEM calls glitter overnight

Option traders turned quick profits on bullish positions in Newmont Mining (NEM) today.

Just before yesterday’s closing bell, Investitute’s market scanners identified the purchase of 2,600 Weekly $36 calls, expiring today, June 14, for $0.07 and $0.08 with shares at $35.56. Volume was well above the strike’s previous open interest of 235 contracts, showing that this was fresh buying.

Those calls traded for $0.25 today, 3 times their purchase prices. The stock rose 1.86% in the same time frame, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

NEM reached a high of $36.24 mid-session today before ending up 1.07% at $35.93. The precious-metals miner has risen with the price of gold and silver in recent weeks, as gold made a new 52-Week high today.