3 Gold Stocks Seeing Heavy Options Activity – Schaeffers Research (blog)

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North Korea’s latest missile test has revamped geopolitical tensions — and has traders rushing to safe-have assets, with gold futures trading at their highest levels since last September. Likewise, several gold stocks are trading higher, including AngloGold Ashanti Limited (ADR) (NYSE:AU)Kinross Gold Corporation (USA) (NYSE:KGC), and Randgold Resources Ltd. (ADR) (NASDAQ:GOLD). Here’s a quick look at how shares of AU, KGC, and GOLD are trading today, and how options traders are reacting to the bullish gaps.

AU Stock Put Options Hot Amid Sector Rally

AngloGold Ashanti shares are trading up 4.7% at $9.95. However, the shares remain more than 5% lower year-to-date, and were quickly rejected at the $10 mark earlier. This round level has served as a stiff layer of resistance since a late-June bear gap brought AU stock into single-digit territory.

Today’s options traders are targeting the $10 level, too, with 57% of the 19,316 puts on the tape so far — 30 times what’s typically seen at this point in the day — centered at the September 10 strike. It seems safe to assume new positions are being purchased here. In other words, speculators expect AU stock to stay south of $10 through expiration at the close on Friday, Sept. 15.

KGC Options Traders Target Vital Technical Level 

Kinross Gold shares were up 3% at their session peak, but have since pared these gains to 0.3% to trade at $4.41. While the stock is up 41.8% year-to-date, the $4.50 region has kept a tight lid on KGC stock since last August, with the stock hitting an intraday peak of $4.53 this morning.

In the options pits, 7,105 calls and 4,018 puts have traded so far — nine times the average intraday rate, and volume is pacing in the 94th annual percentile. The January 2019 4.50-strike put is most active, with 3,479 contracts traded. Interestingly, it appears traders are selling to open these puts, expecting KGC to overcome this level of technical resistance over the next 16 months or so. 

GOLD Stock Heads Toward Highest Close in Almost a Year

Randgold Resources shares have tacked on 2.3% to trade at $102.32, widening their year-to-date lead to 34.1%. Plus, GOLD stock is now trading north of the century mark, which stifled an early June rally — pacing to its highest daily close since September 2016.

Options traders are responding in kind, with calls trading at four times the expected intraday rate — though with 1,371 contracts on the tape, volume is still relatively low on an absolute level. Regardless, buy-to-open activity has been detected at the October 105 call, with some traders targeting a move north of $105 in the next two months.

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