Alcoa Stock Pops on S&P 400 Addition

Call traders are targeting the aluminum stock today

Assistant Editor
Dec 14, 2021 at 10:25 AM
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The shares of aluminum name Alcoa Corp (NYSE:AA) are up 6% to trade at $50.64 at last check, after news that the stock will replace Hill-Rom Holdings (HRC) on the S&P MidCap 400 Index, following Baxter International's (BAX) acquisition of the latter. The changes will be effective before the open on Monday, Dec. 20.

On the charts, Alcoa stock has had a choppy last few months. The $45 level served as a floor during this time, apart from AA's early December pullback, which was caught by the 140-day moving average. Year-to-date, the equity is up 120%. 

The majority of analysts are bullish on the stock, with six of the seven in coverage carrying a "strong buy" rating, while one says "hold." Plus, the 12-month consensus price target of $59.03 is a 16.4% premium to current levels. 

Call traders are chiming in after the news, with call volume running at double the intraday average today. So far, 15,000 calls have crossed the tape, in comparison to 2,007 puts. The January 2022 50-strike call is the most popular, followed by the December 50 call. 

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