RIO is currently stuck in an eight-day losing streak, and options bears are piling on
Rio Tinto plc ADR (NYSE:RIO) is getting into the lithium market. The global mining giant that produces iron ore, copper, aluminum, and other materials officially announced its purchase of U.S.-based Arcadium Lithium (ALTM) for $6.7 billion, or $5.85 per share. RIO is down 2% to trade at $65.37 in response, while ALTM is 30% higher to trade at $5.55.
Rio Tinto stock gapped lower by 4.3% yesterday when the news first broke. The shares are mired in a eight-day losing streak and are now 12.1% lower in 2024. In the last 12 months, the equity is holding its year-over-year breakeven level at 4.6%.
Options traders have preferred puts lately. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), RIO's 10-day put/call volume ratio of 1.00 sits in the elevated 86th percentile of its annual range, meaning options players have been reaching for long puts at a quicker-than-usual clip.
Those purchasing short-term options are finding relatively rich premiums at the moment, per the stock's 30-day at-the-money historical volatility (HV) of 33.5%, registers in the 99th annual percentile. That's not too surprising though, considering the security's 60-day historical volatility (HV) of 27.2%, registers in the 100th annual percentile.