Market News

January 11, 2017  Wed 12:29 PM CT

AK Steel is attracting upside option activity ahead of quarterly results in less than two weeks.

Our tracking program detected the purchase of more than 4,000 January 11.50 calls for $0.24 to $0.32 today. Volume volume was well above the strike's open interest of 1,761 contracts, showing that this is fresh buying.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

AKS is down 0.71 percent to $10.97 in afternoon trading but has rocketed 127 percent in the last three months. The steel maker is scheduled to report earnings before the market opens on Jan. 24.

Overall option volume is about average in AKS so far today, but calls outnumbered puts by a bullish 3-to-1 ratio.

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