Newmont Mining has soared this month, rising more than 22 percent for October. And one trader is betting that the mining company could add more to its impressive gains.
Andrew Keene of AlphaShark said Newmont's stock has been "absolutely on fire," and the charts still look bullish.
He said the stock has broken above its 50-day moving average, turning the previous resistance level into support at $18. However, he said Newmont will likely run into more resistance as it nears its 200-day moving average.
"We haven't been above the 200-day moving average since June. So I think it has some headway at $20," he said Thursday on CNBC's "Trading Nation." "If I don't think it's going above $20 but I think the chart is bullish, I can think about a different strategy."
To act on his thesis, Keene is selling the January 18-strike put, and for protection, buying the January 17-strike put for 30 cents. The trade is profitable if Newmont shares are above $17.70 by January expiration.
The stock opened lower on Friday morning, trading at about $19.60. A move to $17.70 would be about a 10 percent drop.
"I like this trade because the stock can move higher, it can be flat, or it can move lower, as long as it doesn't move lower more than 10 percent," Keene said.