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February 28, 2013  Thu 2:14 AM CT

MT: SEE CHART GET CHAIN FIND STRATEGIES
ArcelorMittal is down sharply this year, but one trader apparently believes that further downside will be limited.

optionMONSTER systems show that a trader sold 2,300 September 13 puts in one print for $0.87 yesterday. This is clearly a new position, as open interest in the strike was just 78 contracts before the session began.

The put selling is a bet that MT will hold above $13 through mid-September. If the stock falls below that strike price, the trader will face the obligation to buy the shares. (See our Education section)

MT rose 1.94 percent to $15.21 yesterday, bouncing from its lowest close since November in the previous session. Shares of the Luxembourg-based steel and mining company have been falling for the last month since testing resistance at $18, the same level where the stock traded on the first day of 2013. 
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Market Level Making You Nervous, Huh? Part 3

In last week's article, we discussed how important the extra cash you save by using the Stock Replacement Strategy over buying the actual stock is! That extra cash in our account instead of being unnecessarily tied up in a stock position allows us to buy the puts we would need to protect our downside in the case of a major sell-off.

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