Bulls are coming back to ArcelorMittal

By David Russell,

Shutterstock photo

For the second session in a row, the bulls are targeting ArcelorMittal.

optionMONSTER's Heat Seeker tracking system detected the purchase of about 3,200 May 18 calls for $1.15 and the sale of an equal number of May 18 puts for $1.08. Volume was more than 4 times open interest at both strikes.

The trade cost about $0.07 and will mimic owning shares in the Luxembourg-based steelmaker. They will earn quick leveraged gains if it rallies and face losses of a similar magnitude to the downside. (See our Education section)

On Wednesday , almost 20,000 January 2014 20 calls were bought for $2.95 in hope that MT will power climb over the next 21 months. Those contracts are now quoted at $3.10 with the stock higher today.

MT is up 4.76 percent to $18.28 in afternoon trading but is still down about 49 percent in the last year. Most steel makers and related companies, such as coal miners and copper producers, have underperformed since last summer's market crash as investors worry about sovereign debt problems in Europe and slower growth in China.

The now stock appears to be holding long-term support after bouncing at its lowest level since mid-December earlier this week.

Overall option volume is more than twice the average amount so far today, according to the Heat Seeker.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing Options
Referenced Stocks: MT

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