Avalon Rare Metals (AVL) is rallying and order flow is bullish amid a rally in the rare earth names today (REE, MCP also up). The gains in the space are apparently related to a Bloomberg story that notes a key rare earth plant in Malaysia is being delayed by government officials due to safety concerns. The news seems to be fueling expectations that tighter supplies will result in higher prices for rare earth materials used in products like hybrid cars and flat screen TVs. AVL is up 6.75 percent to $6.96. Options volume is 5X the average daily after 5,475 calls and 875 puts traded on the Toronto-based company. Jul 7.5s, which are now 8.1 percent OTM and expiring in 15 days, are the most actives. 2,630 traded. Oct 7 calls are busy as well.
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.