U.S. Steel Stock Rises on Upbeat Guidance

X options are attractively priced at the moment

Managing Editor
Jun 6, 2018 at 10:20 AM
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Steel stocks have been in focus lately, as President Donald Trump's imposed metal tariffs set off a chain reaction of retaliatory trade measures. Against this backdrop, United States Steel Corporation (NYSE:X) stock is up 2.5% to trade at $37.79 this morning, after the company said it is expecting its full-year EBITDA to be near the high end of its previously stated range, and confirmed its current-quarter outlook. This came in the same announcement that revealed it's reopening a blast furnace at its Granite City plant. 

Still, today's rally appears to be losing steam at the $38 level, which has acted as a ceiling since a late-March slide. U.S. Steel stock scored a nearly seven-year high of $47.64 on March 1 before the pullback, although the dip was contained by its 200-day moving average. Looking back over the last 12 months, X stock has nearly doubled.

There's plenty of optimism toward the security in the options pits. X's 10-day call/put volume ratio of 3.69 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the elevated 93rd annual percentile. The high percentile shows the rate of call buying has been unusually accelerated relative to put buying lately.

Traders looking to speculate on U.S. Steel's near-term price action may want to do so with options. The stock's Schaeffer's Volatility Index (SVI) of 41% ranks in just the 16th annual percentile, suggesting short-term options are cheaper than usual, from a volatility standpoint.

Shifting gears to today, call volume has ramped up in early trading. More than 13,000 X call options have changed hands, which is almost three times the expected amount. Leading the charge is the June 38.50 call, followed by the July 40 call, though data suggests most of these positions have crossed near the bid price.

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