benzinga67d ago
Barrick Mining Corp (NYSE:B) easily ranks among the hottest securities in the gold market, having gained 18% since the start of January. Additionally, over the past 52 weeks, B stock skyrocketed to the tune of 220%. Still, with so much enthusiasm baked into the security, the immediate concern is that a corrective lull may transpire. Those who are aggressive can use options to scalp some profits on this possible downside.To clarify, the long-term narrative for Barrick stock appears robustly bullish. Fundamentally, one of the biggest catalysts of the precious metals complex is demand from central banks. According to the World Gold Council, this institutional acquisition has now averaged roughly 60 tons per month, more than triple the pre-2022 pace. Combined with industrial (particularly tech sector) demand for silver and other important commodities, the overall framework is compelling.Still, the equities market is non-ergodic, meaning that even though the longer-term performance may be positive, the chart can temporarily be punctuated by negative price action. This non-ergodicity is best expressed in the options market, where traders effectively buy insurance against either downside or upside risk.In the case of B stock, exposure to the bullish narrative is clearly overcrowded. We're talking about a security that has gained over 140% in the past six months. Because of this rally, bullish conviction is no longer the dominant theme in the options market.Looking at volatility skew — a screener that identifies implied volatility (IV) or the target stock's expected kinetic outlook — put option IV is mostly priced higher than call IV across the strike price spectrum for the Feb. 20 expiration date. That's an obvious signal that smart money is prioritizing downside protection by effectively buying volatility insurance and also being synthetically short B stock to protect the underlying holdings' value.Of course, the smart money isn't automatically ...Full story available on Benzinga.com
