Ivanhoe Mines Trading on Mongolia Talks, Up 44% in July

Submitted by theStockMasters... on Fri, 07/17/2009 - 16:55

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Financial News

Ivanhoe Mines (NYSE:IVN) has bounced this month alone (July 09') from $6 to $8 to $9, back to $7 and now settling a just above $8 a share. The reason? Negotiations with the Mongolian government and the press surrounding the talks that swings on a moments notice all over the Oyu Tolgoi deposit, which is expected to produce around 440,000 tonnes of copper a year, and 320,000 ounces of gold over its 35-year life. Big Bucks, No Whammies?

Fellow Masters, if you want to have some fun playing the news and traders betting for the deal to be closed on the Oyu Tologi deposit with the corporations and Mongolian government, step right up. There's a large bullish bet on Ivahoe shares, last week investors bought to open 12,013 calls and 307 puts on IVN during the past week.

Via Schaeffers:
While there's no clear timeline for the venture to be rubber-stamped, option traders are playing it safe by purchasing plenty of time premium: IVN's most popular call option is the December 7.50 strike, with 24,852 contracts in residence.

However, it seems that shorter-term traders have even higher hopes for IVN. With 22,049 out-of-the-money contracts located at the stock's July 10 call, IVN could struggle this week as options-related resistance begins to take effect.

Take a look at the July 09 options that expire today! It's crazy pills:

CALL OPTIONS

Expire at close Fri, Jul 17, 2009

Strike	Symbol	Last	Chg	Bid	Ask	Vol	Open Int
2.50	IVNGZ.X	5.10	0.00	5.30	5.80	2	1
5.00	IVNGA.X	3.00	0.25	3.00	3.20	1,010	3,141
7.50	IVNGU.X	0.60	0.20	0.55	0.65	546	7,146
10.00	IVNGB.X	0.05	0.00	N/A	0.05	1,491	22,740
12.50	IVNGV.X	0.05	0.00	N/A	0.10	766	765

PUT OPTIONS

Expire at close Fri, Jul 17, 2009

Strike	Symbol	Last	Chg	Bid	Ask	Vol	Open Int
2.50	IVNSZ.X	0.03	0.00	N/A	0.05	0	1
5.00	IVNSA.X	0.05	0.00	N/A	0.05	180	3,282
7.50	IVNSU.X	0.15	0.00	N/A	0.05	1,933	18,818
10.00	IVNSB.X	2.35	0.00	1.85	2.05	9	1,242
12.50	IVNSV.X	4.90	0.00	4.30	4.70	208	114

PLACE YOUR BETS

If Ivanhoe's saying we may have to negotiate more, that means it's getting delayed.

Last week, shares climbed on speculation that a final deal was close at hand. One month earlier, the stock dropped when a Mongolia's president-elect said he wanted to change the investment deal with Ivanhoe to profit sharing from an equity stake, according to a Bloomberg News report.

The Mongolian government wants an agreement in order to ensure a steady flow of revenue from the mining sector.

But parliament is more reluctant, fearing that foreigners will benefit more than Mongolia from the deposit.

Fellow Masters, use caution when playing this stock and Monday should be interesting to watch the action as July Options will be expired. Happy Safe Trading, I'll wait until Monday to determine if I'm making a position..

Disclaimer: No positions in IVN.