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Teck Resources Ltd (USA) (TCK) is getting hammered after the firm denied merger rumors
Teck Resources Ltd (USA) (NYSE:TCK) has plunged 9.2% today to trade at $13.86, after the company denied rumors it is in merger talks with Antofagasta PLC. The drop has landed TCK on the short-sale restricted list. Meanwhile, options traders are exchanging TCK puts at an accelerated clip.
Diving right in, TCK puts are crossing the tape at nearly four times the average intraday rate, and outstripping calls by a more than 3-to-1 margin. One strike seeing notable activity is the out-of-the-money April 12 put, which is being sold to open. In other words, these option writers anticipate TCK will remain above the strike through the close on Friday, April 17, when front-month options expire. Data from the International Securities Exchange (ISE) confirms this theory.
Short-term puts have been popular in TCK's options pits for a while. The commodities stock's Schaeffer's put/call open interest ratio (SOIR) checks in at 3.32, signaling put open interest more than triples call open interest among options in the front three-months' series. What's more, the SOIR is higher than 90% of comparable readings from the last 52 weeks.
On the technical front, Teck Resources Ltd (NYSE:TCK) has had a woeful time over the long term. Year-over-year, the shares have slid 36.4%, and are facing upside resistance in the form of their 32-week moving average.