What’s behind Eldorado put sale

A large put sale tops today’s option activity in Eldorado Gold.

optionMONSTER systems show that a trader sold 7,000 January 2016 5 puts, 5,600 of them for $0.75 and the rest for $0.80. This is clearly a new position, as volume was well above the strike’s previous open interest of 1,644 contracts.

The option action may have been tied to trading in EGO stock, where 210,000 shares traded for $5.90. Combined with the short puts, that would create a delta-neutral play that is focused onvolatility instead of a specific direction of the stock.

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