Market News

November 23, 2016  Wed 11:32 AM CT

Shares of AK Steel have almost doubled in the last three months, but traders apparently believe that further gains will be limited in the next two weeks.

OptionMonster's monitoring systems show that about 10,100 Weekly 9.50 calls expiring on Dec. 2 were sold for for $0.18 to $0.20 today. These are clearly new positions, as open interest in the strike was a mere 3 contracts before the session began.

Short calls generate income and lock in the price where a stock must be sold. The trade is usually done in conjunction with long shares in a covered-call strategy, reflecting a belief that gains will be limited through expiration. (See our Education section)

AKS is off a penny to $8.89 in midday trading but is up 93 percent in the last three months. The steel producer's next earnings report is expected in pre-market hours on Jan. 24.

Overall option volume is about average in AKS so far today.

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