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 Cliffs Natural Resources Inc (NYSE:CLF), where traders are targeting short-term puts.
Cliffs Natural Resources Inc put volume is holding a slight edge over call volume this afternoon. Specifically, short-term speculators are targeting the weekly 8/8 17-strike put, which -- with 2,900-plus contracts on the tape -- is CLF's most active option by a greater than three-fold margin. The majority of the weekly puts have crossed on the ask side, implied volatility is 7.5 percentage points higher at 59.4%, and volume outstrips open interest, collectively suggesting buy-to-open activity.
The volume-weighted average price (VWAP) for the contracts is $0.21, resulting in a breakeven mark of $16.79 (strike less VWAP) at tomorrow's closing bell, when the weekly options expire. Profit will increase on a move all the way down to zero, whereas losses are limited to the initial premium paid, if CLF ends the week above the strike.
On the charts, the stock is off 0.4% at $17.09. However, the 17 strike has acted as a notable layer of support during the last seven sessions, and could again send CLF on its next leg higher. In fact, the shares have been notching a series of higher highs and higher lows since touching a five-year low in mid-June, and have outperformed the broader S&P 500 Index (SPX) by nearly 21 percentage points in the past two months.
In fundament news, Cliffs Natural Resources Inc (NYSE:CLF) named Laurenco Goncalves as its new chairman and CEO this morning. This development follows Casablanca Capital LP's successful six-month proxy fight to win control of the company's board.