Alcoa Stock Dips on Alumina Merger

The options pits have been more bearish than usual

Deputy Editor
Feb 26, 2024 at 10:54 AM
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The shares of Alcoa Corp (NYSE:AA) are sliding today, after news that the company is aiming to buy Alumina for $2.2 billion in an all-stock deal. Dropping aluminum prices are denting Alumina, and the merger would provide tax advantages to both. 

At last glance, AA was down 2.9% at $25.75, earlier as low as $24.86 -- its lowest level since mid December. The stock is below all moving averages between the 20-day and 320-day, with recent pressure from the former. Since last February, the equity is down 44.8%. 

Options bears are eyeing Alcoa stock amid the negative price action, with put volume running at double the intraday average volume. The 4,579 puts exchanged so far also slightly outweighs the 3,582 calls, with the weekly 3/1 24.50-strike put seeing the most activity. 

Over the past two weeks, though calls and puts have been traded evenly with a 1:1 ratio, puts have been traded at a much faster-than-usual rate. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), AA's 10-day put/call volume ratio ranks higher than 99% of readings from the past year. 


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