AK Steel trade sees lower volatility
Chris McKhann | [email protected]
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.