This blog post was written by OptionMonster's By Chris McKhann.
The price of Yamana Gold has followed in the general trend of the metal itself, but the stock is up more than 100 percent over the last 2.5 months.
One trader is using the options to try to ride that move up, purchasing 10,000 of the February 5 calls for $1.86 and selling the same number of January 5 calls for $1.67, according to OptionMonster's tracking systems.
Using the in-the-money options limits exposure to time decay, and this trader is paying only $0.19 for an additional 35 days for the stock to rally.
- More Options Tips from Jon Najarian
AUY is up 5 percent today, trading at $6.70 as it pushes back up toward recent highs. Gold futures are up half as much, at 834. The stock still appears to have considerable upside, as it traded as high as $19.93 back in March and above $10 in late September.
More Global Gold Miners:
Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.com.