Options traders react to Barrick Gold’s return to Mali

Options traders are zeroing in. Barrick Gold Corporation (NYSE:GOLD) Stock as the company faces turmoil following the shutdown of operations in Mali. The decision comes after the Malian government seized 3 metric tons of gold worth $245 million from the company’s Lulo-Gonkoto mining complex. The move, linked to a dispute over the share of revenue owed to the government, marks growing military pressure on foreign mining companies as Mali takes greater control over its mineral resources.

Shares of Barrick Gold It was last seen 0.3% higher at $15.75, but is down 21.1% over the past three months. GOLD faces resistance at the $16 level and the 30-day moving average, although the $15 mark will soon provide support to limit further losses.

Unusual activity in options was associated with the news, with 56,000 calls and 50,000 puts traded today – four times the average daily volume. The most active contracts are the January 14.5 call and 14.5 put, and new positions are the weekly 1/31 16 strike call and put.

While puts and calls are evenly matched today, bear bets have dominated over the past 10 weeks. According to the International Securities Exchange (ISE), Cboe Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX), the security’s 50-day call volume is 0.57, a figure that sits in the 99th percentile of its annual range. In other words, while calls have generally put up, traders have been unusually bullish lately.

Barrick Gold stock has consistently rewarded premium buyers for investors willing to join in on the action. This is reflected in Schaeffer’s Volatility Scorecard (SVS) rating of 86, which indicates that the stock tends to deliver higher-than-expected moves relative to the options market’s lower volatility expectations.