Gold producer Alamos Gold (AGI) is up 70% over the past year, far outperforming the S&P 500. One trader sees the potential for a pullback this year.
That’s based on the November 2025 $18 puts. With 289 days until expiration, 6,001 contracts traded compared to a prior open interest of 108, for a 56-fold rise in volume on the trade. The buyer of the puts paid $0.97 to make the bullish bet.
Alamos has had a fantastic year, with earnings up a massive 115%, and revenues up 41%, thanks in part to strong production and higher gold prices overall. Shares are right at their 52-week high, and would need to reverse lower by nearly 15% to move in-the-money.
With the metal soaring past $2,800 per ounce, it’s more likely that Alamos has more upside ahead rather than downside, as revenues can likely continue to keep climbing. However, as with all commodity stocks, there will be sharp pullbacks along the way.
Action to take: Momentum investors may like shares here. And investors may want to buy a partial stake now, and use any pullbacks to add to that position given gold’s fundamentals right now.
Plus, at current prices, Alamos pays a 0.5% dividend, which is amply covered by earnings and could even by increased in the years ahead.
For traders, the November 2025 puts may play out well for a short-term pullback in gold, but the calls are a better bet. The June $25 calls, last trading for about $0.85, could see mid-to-high double-digit returns if shares keep trending higher.
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.