OptionsHouse

Options Trading News

June 13, 2013  Thu 4:14 AM CT

MT: SEE CHART GET CHAIN FIND STRATEGIES
Traders apparently think that ArcelorMittal is going nowhere in a hurry.

optionMONSTER's tracking programs detected the purchase of 12,850 December 13 calls for $0.82 and the sale of an equal number of December 12 calls for $1.19. Volume was below open interest in the 13s, indicating that an existing short position was closed and rolled to the lower strike.

Investors sell calls when they believe that upside is limited, allowing them to collect premiums as income if they're right. In the case of yesterday's credit spread, the trader received a $0.37 of premium while lowering by $1 the price at which he or she is effectively short the stock. The trade reflects a belief that the European steel maker will remain weak until at least late this year. (See our Education section)

MT fell 1.82 percent to $11.87 yesterday and has been declining steadily for the last three years. While it's been taking steps to improve its finances, a weak global economy has discouraged investors from owning industrial metals. (See the steel-maker group on researchLAB for more)

Total option volume in the name was 7 times greater than average in the session.
Share this article with your friends


Related Stories

MT

ArcelorMittal faces bearish positions

February 10, 2016

The Luxembourg-based steel maker has lost more than half its market value in the last three months, and traders are positioning for even more losses.

OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »