Heavy Call Buying in Miner Teck Resources (TCK)

On today’s Options News, Carrie Long and the ONN.tv team look at Monday’s pre-market price action in the broader market, highlighted by futures edging up despite Friday’s sell-off.

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At the close Friday, the Dow dropped 109 points to 9,972, and the S&P 500 closed down 13 points to 1,079. The VIX popped up 8% on the down-market day, suggesting investors expect way more movement throughout the remainder of earnings season.

Early Market Indications

Ahead of the U.S. market open, S&P 500 futures are up 1.5 points to 1,078. Hong Kong is up 1.7% and Europe is up 0.1%.

Bullish Call Buyers Bank of Dollar Drop

Mining name Teck Resources (TCK) saw heavy call buying action as investors turn bullish on commodity stocks. An investor bought the January 40 calls 17,000 times with the stock trading at $33.48 a share. TCK is due to announce earnings per share figures on Wednesday, and consensus estimates expect 47 cents a share out of the company’s report. Tying in this call buying action with the bullishness we saw in Barrick Gold (ABX) last week, we can see gold pushing higher as the dollar drops. As a result, the Australian dollar (Australia’s federal reserve bank continues to raise interest rates on signs of recovery) is the prime beneficiary. Kevin Cook, market analyst at ONN.tv, also explains a carry trade on the CME Australian dollar.

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