OptionsHouse

Options Trading News

February 27, 2013  Wed 12:22 PM CT

X: SEE CHART GET CHAIN FIND STRATEGIES
One investor is determined to make money in U.S. Steel.

optionMONSTER's Heat Seeker monitoring system detected the purchase of about 5,000 May 22 calls for $1.29. Two minutes late some 10,000 April 25 calls were sold for $0.21, but volume was below open interest.

This indicates that the trader previously owned the April 25s in hopes of a rally but is apparently worried that it might take longer to occur. He or she now has an additional month of upside exposure while lowering the strike price.

The resulting position will provide more leverage to the upside over a longer time frame. The investor paid $435,000 to make the switch. (See our Education section)

X is up 1.79 percent to $21.08 in afternoon trading but is down 11 percent so far this year. The stock been trying to climb since last summer but recently has been hitting resistance at its 200-day moving average.

Total option volume is almost twice the daily average so far in the session, with calls outnumbering puts by more than 4 to 1.
Share this article with your friends


Related Stories

X

How traders are hedging U.S. Steel

May 8, 2015

The steel maker gapped down after a poor earnings report on April 28 and has since traded sideways with resistance at its 50-day moving average.

X

How bulls are playing steel earnings

April 27, 2015

Traders were buying calls in several steel companies at the end of last week, ahead of quarterly results in coming days.

OptionsHouse

Premium Services

Archived Webinar

Education & Strategy

Short synthetic stock

With the use of the calls and puts we can not only create Long Synthetic Stock, but Short Synthetic Stock as well...

View more education articles »