Options Radar: Barrick Gold, JDS Uniphase, and U.S. Steel

Reviewing notable options activity on Barrick Gold Corporation (USA), JDS Uniphase Corp, and United States Steel Corporation

Digital Content Group
Oct 29, 2014 at 2:41 PM
facebook twitter linkedin

Three stocks seeing notable options activity today are commodity concern Barrick Gold Corporation (USA) (NYSE:ABX), communications expert JDS Uniphase Corp (NASDAQ:JDSU), and metal magnate United States Steel Corporation (NYSE:X). Here's a look at how today's options traders have been placing their bets on these three names.

  • Ahead of tonight's third-quarter earnings report, Barrick Gold Corporation (USA) (NYSE:ABX) is off 4.2% at $12.95, after earlier touching a 14-year low of $12.90. Not surprisingly, puts are flying off the shelves at more than double the expected intraday rate. It appears short-term ABX options are in demand, too, based on the stock's 30-day at-the-money (ATM) implied volatility (IV), which has gained 1.6% to 34.5%. Digging deeper, the equity's November 12 put is seeing buy-to-open activity, as option bears wager on lower lows over the next several weeks.

  • JDS Uniphase Corp (NASDAQ:JDSU) will also report quarterly numbers later this afternoon. In the lead-up to that event, the shares are off 1.1% at $12.33, bringing their year-to-date deficit to 5%. Meanwhile, puts are trading at a breakneck pace -- 11,000 contracts are currently on the tape, versus an expected amount of roughly 500 -- and the security's 30-day ATM IV has popped 7.5% to 46.7%, suggesting short-term strikes are sought-after. Digging deeper, near-term option bears are buying to open JDSU's November 11 put, anticipating additional downside. Meanwhile, longer-term skeptics may be selling to open the stock's January 2015 13-strike call, rolling the dice on a technical ceiling over the next several months.

  • United States Steel Corporation (NYSE:X) has soared 5.8% to trade at $40.37, after besting the Street's earnings and sales estimates for the third quarter. In so doing, the equity is shrugging off a price-target cut to $42 from $48 at Jefferies, which also reiterated its "hold" opinion on the shares. In the options pits, volume is double what's expected at this point in the day. Most active is X's January 2015 40-strike put, which bearish bettors are buying to open in the hopes of a retreat below the round-number $40 level. Another strike seeing significant activity is the November 45 call, where traders are writing to open positions in the expectation of a short-term ceiling. However, should X continue to run higher -- the shares are up 37% year-to-date -- an unwinding of this pessimism could result in tailwinds.



These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!


Common mistakes options traders make


Special Offers from Schaeffer's Trading Partners