Century Aluminum (CENX) Slide Prompts Bearish Betting

Century Aluminum Co (CENX) is following Alcoa Inc (AA) lower

Digital Content Group
Apr 9, 2015 at 2:22 PM
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Century Aluminum Co (NASDAQ:CENX) is following sector peer Alcoa Inc (NYSE:AA) lower this afternoon, down 6.7% at $13.34. Meanwhile, in the options pits, traders are anticipating additional downside for shares of the commodity concern.

At last check, more than 2,400 CENX puts were on the tape, or six times the expected intraday amount. The most active strike is the April 13 put, where 1,145 contracts have been exchanged. Based on the data, at least some of these positions are being purchased to open, as traders look for the underlying to breach $13 by next Friday's close, when the front-month options expire.

However, it's worth noting CENX hasn't ended a week south of the strike in about a year. As such, delta on the April 13 put is negative 0.31 -- representing a roughly 1-in-3 chance the option will expire in the money.

Today's preference for long puts over calls echoes the withstanding trend in CENX's options pits. During the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has racked up a put/call volume ratio of 3.52 -- in the 85th annual percentile.

Options players aren't the only ones betting bearishly on Century Aluminum Co (NASDAQ:CENX) -- which isn't surprising, considering the equity's longer-term technical struggles. During the most recent reporting period, short interest soared 68.5%, and now makes up almost 18% of CENX's total float.

CENX Short Interest

 

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