Calls lock in the purchase price of a stock, so they can generate some nice leverage in the event of a rally, but they will expire worthless if the shares don’t move.
Imagold shares rose 7.49 percent to $15.79 and is up about 50 percent since early August. The entire precious-metals space has been strong recently as the euro has climbed and as investors have correctly anticipated more money-easing policies by the Federal Reserve. Other commodities, including petroleum, have also benefited.
Overall option volume in Iamgold was 12 times greater than average on Friday, with calls outnumbering puts by 7 to 1.
—By CNBC Contributor David Russell.
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David Russell is a reporter and writer for OptionMonster. Russell has no positions in IAG.