Shares of Hycroft Mining Holding Corporation (NASDAQ: HYMC) Wednesday plummeted almost 10% to close trading at $1.37.
On CNBC's "Options Action," Tony Zhang said the average daily volume for this stock remained below 100 contracts before March 8. “But over the past few days, we started to see 5,000, 10,000 and even over 30,000 contracts traded of the March $2.50 call options,” he mentioned.
A buyer Wednesday bought 500 of the April 1/4 call spreads for an average price of 55 cents per contract, Zhang said. He believes this may reflect a longer-term view now that the news is out of AMC Entertainment Holdings Inc (NYSE: AMC) acquiring a 22% stake in Hycroft Mining Holding and its 71,000-acre gold and silver mine in northern Nevada. The trader believes the stock could rise up to $4.
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