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Despite giving up roughly one-third of its value over the past several weeks, United States Steel Corporation (X - 18.45) has attracted a slew of short-term optimists in the options pits. At midday, the equity has seen roughly 11,000 calls cross the tape, compared to just around 6,900 puts.
Garnering most of the attention has been the out-of-the-money weekly 20-strike call, which expires one week from today. Specifically, the short-term call has seen nearly 4,000 contracts change hands on open interest of fewer than 300, pointing to a surge of fresh positions. Plus, 89% of the weekly calls have traded at the ask price, implying they were bought. By purchasing the calls to open, the buyers are expecting X to muscle back atop the $20 level within the next week.
However, today's preference for calls stands in contrast to the growing trend seen on the major exchanges. In fact, 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 0.91, in the 83rd percentile of its annual range. In other words, options traders have bought to open X puts over calls at a quicker-than-usual step during the past couple of weeks.
Plus, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.94 registers in the 81st percentile of its annual range. Or, simply put, near-term options traders are more put-biased than usual at the moment.
Elsewhere on the Street, it's pretty much more of the same. Only five analysts consider X worthy of a "buy" or better rating, compared to nine offering up "hold" or worse suggestions. Meanwhile, short interest accounts for a whopping 26.4% of the stock's total available float, despite depleting by 6% during the past month.
On the charts, it's not surprising to find so much pessimism plaguing X, which has underperformed the broader S&P 500 Index (SPX) by 37% during the past 60 sessions. As alluded to earlier, the stock has retreated significantly since early May, guided to three-year lows beneath its 10-day moving average. In order to reclaim the aforementioned $20 mark, X will have to topple this trendline -- a feat accomplished just twice since April 23. However, the security's Relative Strength Index (RSI) is docked at a slim 27 -- in oversold territory, suggesting a short-term rebound could be in the cards.