Call volume is surging in Gold Fields today, but it’s anything but bullish.
optionMONSTER’s trade scanners detected the purchase of 8,751 April 4 calls for $0.34 and the sale of an equal number of April 3 calls for $0.90. Volume was below open interest at the higher strike, so this is likely an existing short position being rolled lower.
Writing calls generates income but obligates the investor to sell shares if they reach a certain level. He or she could have sold the April 4s at a previous time and now adjusted down to the April 3s. The trader collected $0.56 in the process but is also short the gold miner at a lower price, creating more upside risk.
— Option Monster