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 is Cliffs Natural Resources Inc (NYSE:CLF), as put volume on the mining name ramps up today.
Roughly 11,000 puts have traded on Cliffs Natural Resources Inc in today's session, representing 1.55 times the equity's expected intraday volume. The most active option is CLF's November 15 put, where 5,260 contracts are on the tape.
Most of the volume here traded in a block of 5,000 contracts, which changed hands earlier at $1.15 -- near the prevailing ask price at the time of the transaction. This indicates the puts may have been purchased. Meanwhile, with only 107 contracts in open interest at the November 15 put, it's safe to assume these are newly initiated contracts.
Assuming today's November 15 put volume was buyer-driven, the speculator behind the 5,000-contract trade is betting on CLF to backpedal over the next several months. Breakeven at expiration is $13.85 (put strike less net debit), with profits accruing on a move all the way down to zero. On the other hand, if CLF should remain at or above $15 per share through November expiration, that initial cost of $1.15 per contract is the most the trader stands to lose.
Cliffs Natural Resources Inc (NYSE:CLF) is down more than 2% this afternoon to trade at $15.87, bringing its year-to-date loss to 39.5%. Despite the stock's bleak price action, the options market isn't betting too heavily on an extended decline for CLF. Delta on the November 15 put is currently negative 0.38, as speculators are pricing in roughly 38% odds the option will expire in the money.