Cleveland-Cliffs has some decent short squeeze potential options traders could be eyeing
Cleveland-Cliffs Inc (NYSE:CLF) is up 5.6% at $20.82 at last check, after the mining concern hiked prices of its hot rolled, cold rolled, and coated steel products. The equity has added 28.7% so far in 2023, and is chipping away at its 3.6% year-over-year deficit. A floor at the $19 region recently provided support for shares, as they cooled from a rally to $22.54 earlier this month -- their highest level since June.
The mining stock has caught options traders' attention recently. According to Schaeffer's Senior Quantitative Analyst Rocky White's list of S&P 400 stocks that have attracted the highest weekly options volume in the past 10 days, CLF saw 303,233 calls and 134,776 puts exchanged in that time. The most popular contract over this period was the weekly 3/3 2.50-strike put.
Overall call volume is today running at double the intraday average, with 57,000 calls across the tape so far, compared to 13,000 puts. The most active contract by far is the 3/3 21-strike call, followed by the 20.50-strike call in that weekly series, with positions being opened at both.
Options look like an intriguing route, per CLF's Schaeffer's Volatility Index (SVI) of 48% that sits in the low 3rd percentile of the past 12 months. It's also worth noting the stock's Schaeffer's Volatility Scorecard (SVS) sits at 93 out of 100, indicating it has exceeded option traders' volatility expectations in the past year.
Short sellers have started to hit the exits, with short interest down 16.5% in the most recent reporting period. The 3.07 million shares sold short still account for 7% of the equity's available float, though.