Options Corner: Why New Gold's Options Market Is Bullishly Defying The Merger Playbook

Benzinga_recent_news05:01

Thanks to the resurgence in the precious metals market, New Gold Inc (NYSEAMERICAN: NGD) is back to building on its blistering run. On a year-to-date basis, NGD stock has gained about 266%. Over the ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2593458168?lang=en_US&edition=fundamental","thumbnail":"https://cdn.benzinga.com/files/images/story/2025/12/22/Gold-Bullion-On-Pile-Gold-Coins-At-Tradi.jpeg?optimize=medium&dpr=2&auto=webp&width=240","is_english":true,"pubTime":"2025-12-23 05:01","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2593458168","market":"us","top_or_hot":-1,"title":"Options Corner: Why New Gold's Options Market Is Bullishly Defying The Merger Playbook","media":"Benzinga_recent_news","content":"<div>\n<p>Thanks to the resurgence in the precious metals market, New Gold Inc (NYSEAMERICAN: NGD) is back to building on its blistering run. On a year-to-date basis, NGD stock has gained about 266%. Over the ...</p>\n\n<a href=\"https://www.benzinga.com/markets/options/25/12/49549093/new-gold-ngd-stock-implied-volatility-big-move-earnings\">Source Link</a>\n\n</div>\n","source":"benzinga_recent_news","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Options Corner: Why New Gold's Options Market Is Bullishly Defying The Merger Playbook</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nOptions Corner: Why New Gold's Options Market Is Bullishly Defying The Merger Playbook\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-12-23 05:01 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.benzinga.com/markets/options/25/12/49549093/new-gold-ngd-stock-implied-volatility-big-move-earnings><strong>Benzinga_recent_news</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Thanks to the resurgence in the precious metals market, New Gold Inc (NYSEAMERICAN: NGD) is back to building on its blistering run. On a year-to-date basis, NGD stock has gained about 266%. Over the ...</p>\n\n<a href=\"https://www.benzinga.com/markets/options/25/12/49549093/new-gold-ngd-stock-implied-volatility-big-move-earnings\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1223082519.USD","symbol_name":"SCHRODER ISF GLOBAL GOLD \"A\" (USD) INC AV","start_time":0,"source_url":"https://www.benzinga.com/markets/options/25/12/49549093/new-gold-ngd-stock-implied-volatility-big-move-earnings","article_id":"2593458168","we_media_id":null,"thumbnails":["https://cdn.benzinga.com/files/images/story/2025/12/22/Gold-Bullion-On-Pile-Gold-Coins-At-Tradi.jpeg?optimize=medium&dpr=2&auto=webp&width=240"],"rights":{"source":"benzinga_recent_news","url":"https://www.benzinga.com/markets/options/25/12/49549093/new-gold-ngd-stock-implied-volatility-big-move-earnings","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2593458168","pubTimestamp":1766437260,"columns":[],"sourceInfo":{"source_id":"benzinga_recent_news","name":"Benzinga"},"weMediaInfo":null,"summary":"Thanks to a resurgence in gold prices, New Gold is accelerating toward its February earnings date, thus presenting a bull case for NGD stock.","collect":0,"end_time":0,"defaultTopTitle":"benzinga.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1223082519.USD":"SCHRODER ISF GLOBAL GOLD \"A\" (USD) INC AV","LU1223082196.USD":"施罗德环球黄金A Acc","BK4017":"黄金","CDE":"科尔黛伦矿业","LU1223083913.SGD":"Schroder ISF Global Gold A Acc SGD-H"},"translate_title":"期权角：为什么新黄金的期权市场牛市无视合并剧本","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CDE":1},"content_text":"Thanks to the resurgence in the precious metals market, New Gold Inc (NYSEAMERICAN: NGD) is back to building on its blistering run. On a year-to-date basis, NGD stock has gained about 266%. Over the trailing five sessions, the security is up more than 10%, thereby showing little signs of buyer exhaustion. Indeed, a rare quantitative signal that flashed in New Gold's price chart indicates that even more upside is possible.\nAdding to the enthusiasm, New Gold is scheduled to release its earnings report on Feb. 18. In other words, the bullish thesis revolves around two factors: first, a positive print and outlook could easily boost NGD stock, which is already primed for robust kinetic swings. Second, the record-breaking rally of both gold and silver has resumed after a consolidatory lull. That may help ignite sentiment throughout the early part of the new year.\nOf course, the bullishness toward NGD stock is complicated by a not-so-insignificant detail. In November, Coeur Mining, Inc. (NYSE:CDE) announced that it would acquire New Gold in an all-stock transaction valued at approximately $7 billion. It should be noted that the exchange ratio values NGD at $8.51 per share. Therefore, the current price represents roughly an 8% premium over implied value.\nTo be sure, some investors might view this as too rich a premium ahead of the anticipated closure of the deal, which may occur in the first half of next year, pending shareholder, court and regulatory approvals. However, what's important to keep in mind is implied volatility (IV). As a residual value backed out from actual traded prices — which themselves stem from real money order flows — IV offers a big clue to the expected dispersion of the target security.\nFor the February earnings disclosure, expected move calculators are anticipating a 19.1% move in either direction for NGD stock. Now, we just need to narrow down the possible outcomes to make a trade.\nTo be clear, expected move calculators are useful because they provide an expected dispersion based on real speculative and hedging activities of options traders. However, dispersion does not equate to probability. By plugging the IV into the Black-Scholes formula, you can reverse engineer the expected scale of price movement. However, it does not tell you which outcomes are more likely to materialize.\nNow, there is a \"probability of profit\" metric that is also derived from Black-Scholes. However, this is not a \"real\" probability because Black-Scholes uses a mathematical formula that assumes (forces) a risk-neutral paradigm. But because the stock market is one of the most complex environments ever encountered, this assumption of risk neutrality cannot be assumed.\nIn order to find the likelihood of outcomes, we must develop a non-parametric distributional model. For example, if we took a single 10-week strand of NGD stock, the return during this period won't tell us anything about the performance probability of the other weeks in the dataset. However, if we stacked hundreds of rolling 10-week sequences in a fixed-time distribution, the most frequent behaviors would create a bulge in probability mass.\nThis bulge is risk geometry, which shows the accelerative emotions of buyer sentiment. More importantly, it also shows the transition where buyers are tempted to become sellers.\nUsing this hierarchical framework, the forward 10-week returns of NGD stock can be arranged as a distributional curve, with outcomes ranging between $8.80 and $10 (assuming an anchor price of $9.16). Further, price clustering would likely occur around $9.30.\nThe above assessment aggregates rolling trials since January 2019. However, we're interested in isolating for the current quant signal, which is the rare 4-6-U sequence. In the past 10 weeks, NGD stock printed only four up weeks, yet the overall slope trended upward. This dynamic tells us that even though the bears numerically outnumbered the bulls, the price kept moving higher.\nUnder this scenario, prices would be expected to range between $7.80 and $12.40, which is quite similar to the expected dispersion calculated from IV. However, we also know that probability density would be thickest at around $10.\nBased on the market intelligence above, the smart move may seem to be to target the $10 strike price. Indeed, the 9/10 bull call spread expiring Feb. 20, 2026, allows you to do just that. If NGD stock rises through the second-leg strike ($10) at expiration, the maximum payout only be about 43%. That's not the greatest reward that you can extract from the options market.\nMoreover, because of the highly anticipated earnings disclosure — combined with precious metals momentum heading into the new year — there's a possibility that NGD stock can outperform its usual baseline behavioral state. That's what IV is indicating and more importantly, the 4-6-U quant signal justifies a more bullish posture.\nAs such, I would take a long look at the 9/11 bull call spread expiring Feb. 20, 2026. This trade requires NGD stock to rise through $11 at expiration, which is an ambitious target. However, doing so would extract a maximum payout of roughly 111%.\nPlus, the breakeven price lands at $9.95, which sits right on the thickest part of probability density. Therefore, you would have a solid chance of not losing money while stretching for a big payout. In other words, this trade helps maximize profitability potential while limiting opportunity costs.\nThe opinions and views expressed in this content are those of the individual author and do not necessarily reflect the views of Benzinga. Benzinga is not responsible for the accuracy or reliability of any information provided herein. This content is for informational purposes only and should not be misconstrued as investment advice or a recommendation to buy or sell any security. Readers are asked not to rely on the opinions or information herein, and encouraged to do their own due diligence before making investing decisions.\nRead Next:\nImage: Shutterstock","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.35.12","shortVersion":"4.35.12","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2593458168","isCrawlerRequest":true}