Option Bulls Mine for Gold in Kinross

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The bulls targeted Kinross Gold early on Friday and kept buying all session.

Shortly after the open, OptionMonster’s tracking systems detected the purchase of almost 11,000 August 9 calls for $0.20 to $0.23. Volume continued to build and surpassed 24,500 contracts by the end of the session.

Those calls lock in the price investors must pay to buy stock in the beaten-down gold miner, which has been hugging support around $8 since May. If it rallies, the options will generate some nice leverage, but they will expire worthless if it doesn't move.

Kinross shares were trading around $7.98 when the calls hit, but closed the session up 6.86 percent at $8.41. The August 9 calls more than doubled to $0.43 as the shares pushed higher.

Most gold miners have taken a beating in the last year as sovereign debt worries in Europe have pressured precious metals. Untroubled by inflation , investors have instead sought refuge in U.S. Treasurys and German government bonds.

The option activity continued at a furious pace in Kinross for the rest of the day, with volume exceeding 59,000 contracts in comparison with 4,600 in a typical session. Calls outnumbered puts by a bullish 6-to-1 ratio.

—By CNBC Contributor David Russell

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David Russell is a reporter and writer for OptionMonster. Russell has not positions in Kinross Gold.