Option Traders Expect More Volatility for Gold Miners

The WSJ‘s Tennille Tracy is reporting that options traders are preparing for increased volatility in the stocks of gold mining companies.

In yesterday’s trading, options investors were establishing a “strangle” position in the Market Vectors Gold Miners ETF (GDX) by buying March $30 puts and March $45 calls. The position will only be profitable if the exchange traded fund trades above $49.60 or below $25.40 before mid-March.

The ETF invests in a broad range of range of small-, medium- and large-cap gold mining companies.

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