Short-Term Bulls Circle AK Steel Holding Corporation (AKS)

AK Steel Holding Corporation (AKS) is up 5.5% at midday

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Published on Mar 25, 2015 at 11:39 AM
Updated on Apr 20, 2015 at 5:32 PM

AK Steel Holding Corporation (NYSE:AKS) is displaying rare technical strength around midday, up 5.5% to trade at $4.41 -- but still down more than 25% year-to-date. Not surprisingly, options traders have gravitated toward calls, with the contracts crossing at twice the expected pace for this point in the session.

By the numbers, 6,322 AKS calls are on the tape, compared to fewer than 900 puts. Accounting for nearly one-quarter of the call volume is the near-the-money April 4.50 call, which is seeing buy-to-open activity. By purchasing these positions, the traders anticipate the stock will topple $4.50 by the close on Friday, April 17, when the options expire. On the charts, however, the shares haven't settled a session north of that mark in one month.

Today's bias toward AKS calls over puts is fairly unusual. During the last 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity has racked up a put/call volume ratio of 0.33, which ranks in the 94th percentile of its annual range. Echoing this, AKS' Schaeffer's put/call open interest ratio (SOIR) sits at a 12-month peak of 1.47, indicating short-term put open interest outweighs call open interest by an extreme margin.

Short sellers have also taken a shine to AK Steel Holding Corporation (NYSE:AKS). Close to one-quarter of the stock's float is sold short -- representing more than a week's worth of trading, at average daily volumes.


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