Gold exploration and production company Newmont Mining (NEM) has soared over 40% in the past year thanks to the strong performance of gold. One trader sees further gains going out into 2027.
That’s based on the January 2027 $65 calls. With 640 days until expiration, 24,899 contracts traded, a 97-fold increase over the prior open interest of 257. The buyer of the calls paid $9.00 to make the bullish bet.
Newmont recently traded for about $55, so shares would need to rally by $10, or about 18%, for the option to move in-the-money. The strike price is well over Newmont’s 52-week high of $58.72.
Earnings have jumped 43% in the past year, fueled by higher gold prices. Newmont is also seeing a rising profit margin, with an 18% margin, a healthy level for a commodity-producing company.
And even with the big rally higher, Newmont shares trade for 9 times forward earnings.
Action to take: Investors may like shares here as a momentum play, given soaring gold prices. Gold stocks can be volatile, but patient investors can likely see strong returns over time.
Newmont shares also pay a 2.3% dividend at current prices, which will likely increase with earnings.
For traders, the January 2027 $65 calls have plenty of time to play out, and can likely see mid-to-high double-digit returns. More aggressive traders can use a shorter strike date for potentially stronger returns right now.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.