Someone apparently thinks that ArcelorMittal is going nowhere in
optionMONSTER's tracking programs detected the sale of 13,000
September 18 calls for $0.74. An equal number of June 18 calls was
bought at the same time for $0.41, but volume was below open
interest at that strike. This suggests that an existing short
position was closed and rolled forward in time.
The investor probably owns shares in the European steel maker and
writing calls to earn income
. The strategy obliges him or her to sell their shares for $18 if
they go above that level, and yesterday's adjustment prolonged that
commitment by three months. In return, the trader collected an
additional $0.33 of income. (See our
It's also possible that both halves of the trade are opening
positions, in which case the strategy is a
short calendar spread
. Regardless, the activity reflects a belief that MT will remain
below $18 well into the second half. That could make sense because
it's where the stock double-topped last month.
MT declined 4.91 percent to $15.68 yesterday. Shares have gone
nowhere since August, despite the S&P rallying almost 7 percent
in that time.
The trade pushed total option volume to 12 times greater than
average in the session.
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