Why one bull is staying in U.S. Steel
David Russell | email@example.com
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.