Learn the trade here. Make it on tradeMONSTER

Options Trading News

February 21, 2013  Thu 3:47 AM CT

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

optionMONSTER's tracking programs detected the sale of 13,000 September 18 calls for $0.74. An equal number of June 18 calls was bought at the same time for $0.41, but volume was below open interest at that strike. This suggests that an existing short position was closed and rolled forward in time.

The investor probably owns shares in the European steel maker and has been writing calls to earn income. The strategy obliges him or her to sell their shares for $18 if they go above that level, and yesterday's adjustment prolonged that commitment by three months. In return, the trader collected an additional $0.33 of income. (See our Education section)

It's also possible that both halves of the trade are opening positions, in which case the strategy is a short calendar spread. Regardless, the activity reflects a belief that MT will remain below $18 well into the second half. That could make sense because it's where the stock double-topped last month.

MT declined 4.91 percent to $15.68 yesterday. Shares have gone nowhere since August, despite the S&P rallying almost 7 percent in that time.

The trade pushed total option volume to 12 times greater than average in the session.
Share this article with your friends


Related Stories

MT

Steel bulls turning to ArcelorMittal

September 19, 2014

The Luxembourg-based company has been one of the worst-performing steel makers in the last three months, lagging domestic competitors like U.S. Steel, Nucor, and Steel Dynamics.

Premium Services

Free Webinars

Swing Trading w/ Jon Najarian and Ron Ianieri

Education & Strategy

Make your rules, and stick by them!

New traders often act on the recommendations of others or on gut feel. But that is a quick way to...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER