Replies to post #19969 on Northern Dynasty Minerals Ltd (NAK)

[stargazer123]

"If the Calls are hot, why isn't Nak stock following suit?"

I'm just guessing: Probably 95% of the general population buying/selling a stock don't look to see how options are trading.

People in the know, trade options. Massive, massive leverage.

Years ago I was following a copper mining company. Six months previously it had said that it was talking to other companies to acquire their company. The company was at $9 a share, and stayed there. Analysts evaluated their amount of ore etc., and said a buy out should be $13-$15
The $10 calls started trading at $1 for the March calls, 6 months away. The calls slowly fell and by the last week of trading they were going for 1/16 of a $ ($0.0625) and by Thursday they were at 1/32 of a dollar.

I was watching calls & puts on stocks because I was thinking about trading options. Thursday morning I saw thousands of the $10 calls trading, even though the stock was only at $9.10. All the calls were being traded at 1/32. As the day went on, tens of thousands of call were traded and buyers were having to pay 1/16 of a dollar. Towards the end of the day over a hundred thousand calls had traded, and the price was .25 The stock itself closed down at $9.05.

Friday the stock opened at $13 with a buy out notification. Nobody doing regular trading of the stock had a clue. The people buying the calls might have had a clue. The people that bought the calls for $0.03125 made $3 for every $.03 they spent. Even the people that paid $0.25 made $3, a profit of 1,200%

Same thing could be happening here. 7,453 Nov $2 call contracts traded today
4,029 Nov $3 contracts traded. The day started with only a few contracts traded, but the number of contracts steadily rose during the day. NAK's price fell. The stock wasn't doing anything, but call trading was going gang busters. There was no way $2 & $3 calls should be trading, so I decided that something might be up & bought more shares.

At the end of the day and with 5 minutes left in trading, I bought 9,000 NAK shares for just under .59. With less than a minute left, somebody sold 60,000 shares and the stock plunged to 0.5703 - 0.0197 In after hours trading, it immediately went to 0.59

3 weeks of call trading left. It might be that in 3 weeks my $0.59 stock might be worth $5.90, or even higher. A nice percentage move.