Schaeffer's Trading Floor Blog
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Call volume has spiked today on Alcoa Inc. (AA), with roughly 39,000 of these bullishly oriented options crossing the tape. By contrast, the commodity issue was only expected to see call volume of about 7,400 contracts. The day's most active strike by a mile is the July 15 call, where 30,588 contracts have changed hands so far.

AA price chartTaking a closer look at today's trading, most of these calls crossed the tape in a single block of 27,600 contracts. These calls traded shortly after the open, just above the ask price at $0.74. Implied volatility rose 1.9% following the transaction. With volume easily outstripping open interest at this strike, it's safe to assume that these are newly opened long calls.

AA is trading near $13.31 at last check, which means those July 15 calls are out of the money. In fact, the shares are currently pinned beneath suddenly staunch resistance from their 10-week and 20-week moving averages. The latter of these trendlines has kept AA suppressed below the $14 neighborhood since mid-January.

Thanks to the stock's recent weakness, puts have become a popular choice on AA lately. The shares sport a 10-day International Securities Exchange (ISE) put/call volume ratio of 1.35, which ranks higher than 97.5% of other such readings taken during the past year. In other words, traders have purchased puts over calls at a faster pace just 2.5% of the time.

In light of this data, today's tidal wave of call volume is something of an anomaly. However, with a healthy 7% of AA's float dedicated to short interest, it's possible that these out-of-the-money calls are linked with a hedging strategy.

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