NEW YORK -- Precious metals rallied Monday, and bullish option traders targeted miner New Gold (NGD) - Get Report.

OptionMonster's Heat Seeker system detected the purchase of 6,000 January 4 calls for 35 cents to 40 cents. Volume eclipsed the strike's previous open interest of 1,299 contracts, an indication that new money was put to work.

These long calls lock in the price where shares can be bought in the Vancouver-based company. Their cheap cost helps manage risk and can result in significant leverage on a percentage basis if a rally occurs. 

NGD rose 3.12% to $3.30 on Monday. The stock has lost half its value since last summer and is trying to rebound from its lowest level since 2009. The mining company trades for less than book value as well, which could make some investors expect a rebound. 

Total option volume in the name was 12 times greater than average in the session.Overall calls outnumbered puts by 260 to 1, a reflection of the bullish sentiment. 

-- Written by David Russell of OptionMonster

Russell has no positions in the stocks mentioned