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August 16, 2013  Fri 2:45 AM CT

AKS: SEE CHART GET CHAIN FIND STRATEGIES
A large trader is betting that AK Steel will stay range-bound in the long term.

More than 16,000 AKS options traded yesterday, quadruple its daily average for the last month. Dominating that action were the January 2015 3 puts.

A trader sold a block of 10,000 of those contracts for the bid price of $0.83, according to optionMONSTER systems. That was done against previous open interest of 1,289, clearly showing that it is a new position.

Just after that trade, a block of 260,000 AKS shares was sold for $3.55. Combined with the short puts, this creates an overall position a delta-neutral play that is looking for lower volatility. (See our Education section)

AKS slipped 0.82 percent to $3.62 yesterday. Shares of the steel producer were at support around $3 a month ago but finished Monday at their highest close since mid-March.
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Using synthetic positions vs. actual stock

We now know as absolute fact that a synthetic position is 100% identical to its real position counterpart. It is simply a function of mathematics. So, if they are totally identical then why would a trader ever use the synthetic alternative over the real position?

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