OptionsHouse

Options Trading News

December 5, 2012  Wed 5:07 AM CT

MTL: SEE CHART GET CHAIN FIND STRATEGIES
Mechel is attracting long-term bullish trades as the Russian steelmaker tries to hold long-term support levels.

optionMONSTER's Heat Seeker tracking system detected the purchase of almost 5,700 January 2014 10 calls, most of which priced for $0.75 and $0.80. The activity dominated yesterday's option volume in the name, which normally trades barely 200 contracts per session.

Long calls lock in the price where investors can buy the stock, so they can generate significant leverage in the event of a rally. Yesterday's buying was a bit unusual because those calls don't expire for more than a year, so they're definitely taking a long-term view. (See our Education section)

MTL rose 1.15 percent to $6.14 yesterday. The stock has been clinging to three-year lows around $6 since May. Its chart is similar to that of most other steel and coal companies, which have attracted increasingly bullish trades as China's economy recovers.

Calls outnumbered puts by a bullish 168-to-1 ratio in the session, according to optionMONSTER data.

(A version of this post appeared on InsideOptions Pro yesterday.)
Share this article with your friends


OptionsHouse

Premium Services

Webinar Recording

Turbo Charge Your Trading Profits

Education & Strategy

The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

View more education articles »