Stocks quoted in this article:
The 20 stocks listed in the table below are the S&P 400 MidCap Index (MID) components that have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest today is United States Steel Corporation (NYSE:X), where a longer-term put seller set a $3.5 million floor on the stock.
Put volume is running at two times the average intraday pace on United States Steel Corporation (NYSE:X) this afternoon, although not all of the action is of the traditional bearish variety. Specifically, the stock's April 41 put has seen the most action, with 10,233 contracts on the tape thus far. The majority of these have gone off at the bid price, implied volatility is on the rise, and only 69 contracts currently make up open interest here -- all signs of sell-to-open activity.
The majority of the action at this out-of-the-money strike occurred when a large block of 8,952 puts was sold earlier at $3.90 apiece, resulting in a net credit of roughly $3.5 million (number of contracts * premium collected * 100 shares per contract). This is also the most the speculator stands to gain, should X maintain its foothold atop $41 through the close on Friday, April 17, when the options expire. Her losses, meanwhile, could be quite substantial, should the stock breach the strike price. However, with X last seen at $43.72, this put seller could also be hoping for assignment, and is using these options to gain an attractive entry price on the outperforming equity.
In fact, in 2014, United States Steel Corporation (NYSE:X) has rallied almost 48% to $43.53, and last week alone, the stock tacked on 13.2% following a number of fundamental developments and some bullish brokerage attention (which continued today with a price-target hike to $48 from $35 at Jefferies). Although the equity is trading lower in today's session, its 14-day Relative Strength Index (RSI) is docked at 74 -- in overbought territory -- suggesting a near-term pullback may have been in the cards.