Bulls sticking with Steel Dynamics
Steel Dynamics has been on the rise, and the bulls are sticking with the name.
optionMONSTER's Heat Seeker monitoring system detected the purchase of 5,000 September 21 calls for $1 and the sale of 3,935 August 19 calls for $2.10. Volume was below open interest in the shorter-dated contracts, which indicates an existing position was rolled from one to the other.
Calls fix the price where a stock can be bought, so they track moves to the upside with limited risk. Capital can also be moved between options to take profits and maximize gains. (See our Education section.) Today's adjustment, for instance, yielded a credit of $326,000 and extended their bullish bet one month into the future.
STLD rose 0.96 percent to $21.10 in afternoon trading, and is up 10 percent in the last month. The Fort Wayne, Indiana-based steelmaker has benefited from strong domestic construction activity and recycling. It's outperformed larger peers like Nucor and U.S. Steel.
The stock is also back over its 50- and 200-day moving averages, which could make chart watchers think it's turning bullish.
Total option volume is 9 times greater than average so far today, with calls outnumbering puts by more than 300 to 1.
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