Cleveland-Cliffs Stock Soars After Earnings, Revenue Beat

Options players are targeting CLF at an elevated clip today

Assistant Editor
Apr 22, 2022 at 10:12 AM
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The shares of Cleveland-Cliffs Inc (NYSE:CLF) are up 10.2% at $32.56, after the steel producer and mining concern revealed first-quarter earnings of $1.50 per share on revenue of $5.96 billion, both of which were higher than Wall Street's estimates. In addition, Cleveland-Cliffs hiked its full-year average selling price expectations to $1,445 per net ton, and predicted more record levels of free cash flow in 2022.

Today's surge puts CLF closer to its April 5, nine-year high of $34.04, with the 30-day moving average sitting below as support. Plus, the stock now boasts an impressive 48% year-to-date lead. 

Options traders took a bearish stance before earnings, possibly due to the equity's negative reaction following fourth-quarter top- and bottom-line misses in February. While calls volume is still outnumbering puts on an overall basis, CLF's 50-day put/call ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the 99th percentile of annual readings. Simply put, these traders had a penchant for bearish bets in the last 10 weeks. 

Today's options are bustling with activity, too, with 42,000 calls exchanged so far, compared to 9,047 puts, with total volume running at five times the intraday average. The weekly 4/22 32-strike call is the most popular by far, followed by the weekly 4/29 32-strike call, with positions being opened at the former. 

Lastly, Cleveland-Cliffs stock's options can be had for a bargain. This is according to its Schaeffer's Volatility Index (SVI) of 70%, which sits in the 25th percentile of its 12-month range, which indicates options players are pricing in relatively low volatility expectations right now. What's more, CLF tends to outperform said volatility expectations, according to its Schaeffer's Volatility Scorecard (SVS) rank of 73 (out of a possible 100).


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