Dan Nathan Sees Unusual Options Activity In Newmont Mining

CNBC Options Action's Dan Nathan spoke on the show about an options trade he noticed in Newmont Mining Corp NEM. There was a higher than usual options activity in the name as two time daily average volume was traded and puts outnumbered calls three to one. The stock had a really good session, trading 6.85 percent higher and closing at $19.60. When it was trading at $19.15, a trader bought 12,500 contracts of the March 18 put options and sold 12,500 contracts of the March 16 put options, paying $0.67 for the spread. The trade breaks even at $17.33, or 12 percent lower from the current price, and maximal profit is $1.67. Nathan commented that he is not sure why would anyone sell a put and limit profits in a trade like this one and his conclusion was that the reason might be in increased implied volatility in the name.