Trade lowers the bar on ArcelorMittal
ArcelorMittal has traded very poorly this year, and one investor
is lowering the bar.
optionMONSTER's tracking programs detected the sale of 13,000 September 14 calls for $1.08 and the purchase of an equal number of September 15 calls for $0.73. Volume was below open interest at the higher strike, so there are two possible interpretations of the activity.
One is that the investor owns shares in the Luxembourg-based steel maker and had previously sold the 15s as part of a covered call strategy. He or she then rolled that position lower, collecting an additional $0.35 of income but also sacrificing $1 of potential upside in the stock.
Alternatively, both halves of the trade may have been opened, in which case it was a credit spread . Either way, the trader apparently believes that the stock won't go much above $14 well into the third quarter. (See our Education section)
MT fell 1.17 percent to $13.55 on Friday and is down 22 percent since the beginning of 2013. The broader market is up 9 percent over the same period, which shows the kind of weakness it has suffered. Other steel makers have fared similarly.
Total option volume was more than 5 times greater than average in the session.