A large trader is betting that Cliffs Natural Resources will see a sharp move up or down in coming months.
optionMONSTER systems show that a trader bought 10,354 May 23 puts in one print for the ask price of $1.61. That is clearly a new position, as the open interest at that strike was just 166 contracts before the session began.
Less than a minute later, a huge block of 464,400 CLF shares was bought for $24.4969. The combination of stock and options creates an overall position that is delta-neutral , meaning that he or she is looking for volatility to spike either with further losses or a big rebound. (See our Education section)
CLF slipped 0.34 percent to $23.70 yesterday, its lowest close since the middle of 2009. The mining and natural-resources company has been trending lower for nearly a year, as it was above $73 in March 2012.
More than 48,000 CLF options traded on the day, more than twice its daily average in the last month.
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