By David Russell of OptionMonster
NEW YORK -- Precious metals have been trying to rebound, and Monday the bulls turned to Stillwater Mining (SWC).
OptionMonster's tracking programs detected the purchase of more than 9,500 April 14 calls as premiums rose from 55 cents to 75 cents. Open interest in the strike was just 647 contracts before the trades appeared, so new money was clearly put to work.
These calls lock in the price where a stock can be purchased, letting investors cheaply control a move higher. A rally can also result in significant leverage.
Stillwater shares rose 1.48% to $13.03 Monday and are up 18% in the last month. That compares with a gain of barely 1% for the S&P 500 in the same period, which may suggest that investors are warming to the stock.
Other mining names such as Barrick Gold and Silver Wheaton have traded similarly in recent weeks, also amid bullish options activity.
More than 14,300 contracts changed hands in SWC Monday, roughly 16 times average amounts. Calls outnumbered puts by 91 to 1.
Russell has no positions in SWC.