Steel Stocks See Heavy Options Trading Ahead of Earnings

The White House has yet to issue tariffs for the steel sector

Josh Selway
Jan 23, 2018 at 3:29 PM
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AK Steel Holding Corporation (NYSE:AKS) will report earnings before the open next Tuesday, Jan. 30, and just a day later fellow steel stock United States Steel Corporation (NYSE:X) will be in the earnings spotlight, as well. Both these stocks are experiencing accelerated options trading today, while the steel industry awaits its own decision on import tariffs from the White House.

AKS Options Traders Liquidate February Calls

AK Steel is trading 2.2% higher today at $6.34, extending its momentum from yesterday's bounce off the stock's 200-day moving average. And while AKS remains well below its December 2016 peak of $11.39, the shares are pacing for a third straight monthly win.

Today's options activity shows heavy closing at the front-month February 7 call. More than 25,000 contracts have traded here -- over twice that of the next most popular strike. Data from Trade-Alert shows more than 52,000 of the February 7 calls crossed near the ask price back on Jan. 17.

US Steel Put Trading Accelerated Today

Shares of U.S. Steel are pacing for their first close above the round $40 level since last February, up 2.4% at $40.24. Simply put, the stock has exploded since it fell into the teens last May. And while analysts have been betting on more upside, some of today's options traders are not.

Drilling down, more than 19,000 puts have traded, compared to a daily average of just 13,000. The most popular option overall is the March 38 put, where it looks like most traders are buying to open the contracts. If this is the case, the goal is for X shares to fall below $38 by expiration at the close on Friday, March 16.


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