The carnage in the miners is presenting option investors with a gold-wrapped gift. Newmont has been taken out to the woodshed, down nearly 20% on a “disappointing” outlook that, frankly, the market is misreading. Newmont fell to, and has bounced off of, our favorite chartist Carter Braxton Worth’s favored 150-day moving average. At the same time, Newmont’s options premiums are elevated. Two-month implied volatility — that’s how an options trader thinks about the price of options — is in the 91st percentile. This provides an opportunity to make money if Newmont rebounds off the trend line back toward prior highs, and carries less risk than buying the stock if it falls through. The trade: The bullish risk reversal I want to put on a bullish risk reversal (selling a put to fund a call spread) to capture a move back toward the prior highs. Sell the July $90 strike put @ $5.10 Buy the July $110 strike call pay $11.50 Sell the July $130 call @ $4.25 Net Cost: ~$2.15, or just 2% of the current stock price By selling the put, I’m effectively saying I’m a happy buyer of the world’s premier gold producer at a discount to book value, and I’m using that “fear premium” to pay for a vertical call spread that gives me a clean runway to $130, just shy of the prior highs of $134.88. If volatility falls, or over time, the decay of the short 130 call and short 90 put will offset the decay of the 110 call I own. Notice in the chart below that the trade sees profits above $110, although those profits are capped at $130; that’s okay because that’s close to the prior highs, where the stock will likely encounter resistance. If the stock falls, I risk being compelled to purchase the shares at $90 per share. However, that’s acceptable because 1) that represents a 15% discount to the current price, even net of the ~$2 in premium I paid, and 2) that’s not far from the six-month lows. The bull case: Top shelf assets at a mid-shelf price Newmont is the only gold miner in the S & P 500 for a reason: the Newcrest integration. Newmont acquired the Melbourne, Australia-based miner just over two years ago. Arguably, the capital expenditure guidance is one reason investors must accept that the deal’s “synergies” may take until 2027 to materialize. However, Newmont is stripping away non-core assets to focus on “Tier-1” mines — those producing 500k+ ounces at the lowest all-in sustaining costs. As they monetize smaller mines, the balance sheet gets leaner, and the dividends get safer. The base case: Mean reversion Gold is holding steady despite a firming dollar. Even if gold stays flat, NEM is fundamentally oversold. A simple mean reversion to its historical 15x cash flow multiple puts the stock 30% higher. The bear case: The margin squeeze The risk is persistent sticky inflation. If labor and diesel costs in Nevada and Australia continue to climb, that AISC “floor” moves up, but it’s worth noting that inflation/fiat currency debasement, even if it presents an operational challenge to miners, represents a core thesis for holding precious metals in the first place. So two of the three scenarios are good for gold and gold miners, and one is “less bad.” DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.