Options Players Target Volatile United States Steel Stock

Puts are outnumbering calls, and have rarely been more popular over the last year

Deputy Editor
Oct 10, 2022 at 2:08 PM
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United States Steel Corporation (NYSE:X) stock was last seen up 2.2% at $19.22. The stock snapped a three-week losing streak last week, which included a 20.1% weekly plummet in mid-September. While X has managed to keep some distance from its early July lows near the $16.50 region, it's run into resistance at its 320-day moving average, which coincides roughly with the stock's year-to-date breakeven. On the year, the security is 19.2% lower. 

X Chart October 102022

Despite the volatility in the underlying shares,  X is extremely popular among options players at the moment. In fact, the equity just showed up on Schaeffer's Senior Quantitative Analyst Rocky White's list of S&P 400 (IDX) members with the highest option volume over the past two weeks. During this time period, 223,013 calls and 151,292 puts were exchanged. The most popular position was the weekly 10/7 20-strike call, followed by the October 21 call.

MAO Chart October 102022

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), United States Steel stock sports a 10-day put/call volume ratio of 1.24 that stands higher than 96% of readings from the past year. This indicates that not only are puts outpacing calls, they're being picked up at a faster-than-usual clip.

Options buyers, meanwhile, are in luck. X's Schaeffer's Volatility Scorecard (SVS) tally sits at 98 out of 100, which points towards the equity's tendency to outperform volatility expectations. 

Elsewhere, short sellers are building their positions, adding 15% in the past two reporting periods. The 37 million shares sold short make up 15.8% of the stock's available float, or more than three days of pent-up buying power.



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