Skepticism Ramps Up Ahead of Cleveland-Cliffs Earnings

Short interest has been picking up on CLF

Jul 18, 2019 at 10:51 AM
facebook X logo linkedin

Cleveland-Cliffs Inc (NYSE:CLF) will report earnings ahead of the open tomorrow, July 19. The mining name is coming off back-to-back positive earnings reactions -- with the stock jumping 2.3% and 8.5% the day after the firm's April and February reports, respectively -- but today's options traders are betting against the trend.

At last check, 2,563 CLF puts were on the tape, nearly three times what's typically seen at this point in the day. Most of the action has centered at the July 10.50 put, where it looks like new positions are being purchased for a volume-weighted average price of $0.28. If this is the case, breakeven for the put buyers at tomorrow's close, when the front-month options expire, is $10.22 (strike less premium paid).

Skepticism has been ramping up outside of the options arena, too. Short interest on CLF jumped 11% in the most recent reporting period to 71.67 million shares -- the most since May 2015. This accounts for one-quarter of the equity's available float, or 7.6 times the average daily pace of trading.

Such low expectations levied toward a stock that's up 41% year-to-date opens the door for more gains, especially if Cleveland-Cliffs turns in another well-received earnings report. More recently, the shares have surged 28% since bouncing off the $8.50 level in late May, with recent support emerging at their rising 20-day moving average. Today, CLF is down 1.4% at $10.84.

Looking closer at CLF's earnings history, the mining stock has averaged a 6.4% post-earnings move over the last eight quarters, regardless of direction. In addition to the two positive reactions mentioned above, Cleveland-Cliffs jumped 12.7% the day after earnings this time last year. The options market is pricing in an 11.1% swing for tomorrow's trading, per implied earnings deviation data from Trade-Alert.

clf stock daily price chart on july 18


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI