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Trade lowers the bar on ArcelorMittal

David Russell (david.russell@optionmonster.com)

ArcelorMittal has traded very poorly this year, and one investor is lowering the bar.

optionMONSTER's tracking programs detected the sale of 13,000 September 14 calls for $1.08 and the purchase of an equal number of September 15 calls for $0.73. Volume was below open interest at the higher strike, so there are two possible interpretations of the activity.

One is that the investor owns shares in the Luxembourg-based steel maker and had previously sold the 15s as part of a covered call strategy. He or she then rolled that position lower, collecting an additional $0.35 of income but also sacrificing $1 of potential upside in the stock.

Alternatively, both halves of the trade may have been opened, in which case it was a credit spread . Either way, the trader apparently believes that the stock won't go much above $14 well into the third quarter. (See our Education section)

MT fell 1.17 percent to $13.55 on Friday and is down 22 percent since the beginning of 2013. The broader market is up 9 percent over the same period, which shows the kind of weakness it has suffered. Other steel makers have fared similarly.

Total option volume was more than 5 times greater than average in the session.

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