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), which has seen interesting call activity today.
United States Steel Corporation is extending its quest for three-year highs, peaking at $39.48 in intraday action. At last check, the stock is flirting with a 1.5% lead at $39.39, and it looks like one option trader may be upping the bullish ante.
Around midday, symmetrical blocks of 2,000 contracts traded at the September 37 and 39.50 calls. The lower-strike calls crossed for $2.84 apiece -- closer to the bid price, suggesting they were sold. The higher-strike calls traded for $1.24 each -- closer to the ask price, implying they were likely bought. Plus, volume has surpassed open interest at the September 39.50 call, indicating a crop of new positions.
In other words, it looks like the speculator sold his now-in-the-money September 37 calls to close, for $568,000 (number of contracts x 100 shares per contract x bid price). She then used $248,000 of that (number of contracts x 100 shares per contract x ask price) to purchase the higher-strike September 39.50 calls, leaving her with $320,000 (minus the initial cost to buy the 37-strike calls).
By rolling up her calls, the trader expects X shares to continue their journey into new-high territory, toppling the $39.50 level by the close on Friday, Sept. 19, when front-month options expire. This bullish sentiment marks a change of pace among X option buyers, though, as the stock's 10-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at 2.41 -- just 3 percentage points from an annual high. In simpler terms, option buyers have been picking up X puts over calls at a near-annual-high clip during the past two weeks. A mass exodus of bears in the wake of X's rally could add fuel to the equity's fire.
Analysts are also wary of United States Steel Corporation (NYSE:X). While the stock has outperformed the broader S&P 500 Index (SPX) by more than 64 percentage points during the past three months, six out of 13 analysts maintain "hold" or worse opinions. Should more brokerage firms follow in the footsteps of Credit Suisse, a round of upgrades could propel the shares even higher.