Options Traders See Stars Align For Gold Miners ETF

VanEck Vectors Gold Miners ETF GDX stock broke out Monday at the beginning of a seasonally bullish time for the gold sector.

Bitcoin BTC/USD and other cryptocurrencies were trading lower Monday. Bitcoin and gold often move inversely to each other as traders follow trends relative to which investment is a better store of value at a given time.

Fears of inflation could also help gold to fly higher, as the metal is believed to offer protection against the probability of rising prices as the economy recovers from the pandemic.

A number of options traders believe these three events could make gold miner stocks soar and bet over $1.56 million the VanEck Vectors Gold Miners ETF will trade higher.

The VanEck Vectors Trades: Below is a look at the notable options alerts courtesy of Benzinga Pro:

• At 9:42 a.m., Monday, a trader executed a call sweep near the ask of 2,156 VanEck Vectors options with a strike price of $38.50 expiring May 21. The trade represented a $116,424 bullish bet for which the trader paid 54 cents per option contract.
• At 9:48 a.m., a trader executed a call sweep near the ask of 641 VanEck Vectors options with a strike price of $40 expiring on Jan. 21. The trade represented a $224,350 bullish bet for which the trader paid $3.50 per option contract.
• At 10:52 a.m., a trader executed a call sweep near the ask of 1,881 VanEck Vectors options with a strike price of $39 expiring on Aug. 20. The trade represented a $498,465 bullish bet for which the trader paid $2.65 per option contract.
• At 10:55 a.m., a trader executed a call sweep, near the ask, of 5,000 VanEck Vectors options with a strike price of $44 expiring on June 18. The trade represented a $120,000 bullish bet for which the trader paid 24 cents per option contract.
• At 11:07 a.m., a trader executed a call sweep near the ask of 814 VanEck Vectors options with a strike price of $40 expiring on June 18. The trade represented a $105,006 bullish bet for which the trader paid $1.29 per option contract.
• At 11:08 a.m., a trader executed a call sweep, near the ask, of 1,308 VanEck Vectors options with a strike price of $40 expiring on July 16. The trade represented a $234,132 bullish bet for which the trader paid $1.79 per option contract.
• At 12:15 p.m., a trader executed a call sweep near the ask of 500 VanEck Vectors options with a strike price of $38 expiring on Sept. 17. The trade represented a $177,500 bullish bet for which the trader paid $3.55 per option contract.
• At 1:05 p.m., a trader executed a call sweep near the ask of 726 VanEck Vectors options with a strike price of $44 expiring on June 18. The trade represented a $98,010 bullish bet for which the trader paid $1.35 per option contract.

Related Link: 3 Silver ETFs To Fight Inflation

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price.

A sweeper pays market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

GDX Price Action: Shares of VanEck Vectors were trading up 4.84% to $39.67 at last check Monday.