What's behind large strategy in Alcoa
Chris McKhann | firstname.lastname@example.org
optionMONSTER's Depth Charge system detected the purchase of 6,000 September 9 puts for the ask price of $0.43. The volume was almost twice the open interest in that strike at the beginning of the day, indicating new activity.
Less than two minutes later, the biggest block of AA stock hit the tape, with 384,000 shares bought for $8.7556. The delta of the options is exactly -384,000 (-0.64 x 6,000 x 100), so the overall combined position is directionally neutral. This means that the trader is looking for a stock spike in either direction and/or volatility that is greater than that implied by those puts.
AA gained 0.46 percent yesterday to finish at $8.73. The aluminum producer was up near $9 at the start of the week and has climbed off a 52-week low and long-term support at $8.