X, FIG Options – Unusual Trading Activity – November 1, 2013
This week we’re taking a look at unusual options trading activity in United States Steel (X) and Fortress Investment Group (FIG).
As many of you know, unusual options volume can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.
This is something professional options traders pay a lot of attention to, and for good reason… Unusual options activity can “tip off” big moves in a stock, either up or down.
So let’s take a look at some ‘interesting’ activity that caught our eye this week:
United States Steel (X)
A large amount of puts have changed hands in US Steel this week.
X is currently trading for $25.47 per share and is up 5% for the year. The share price is 62% above the 52-week low of $15.71 and is just 2% below the 52-week high of $26.09.
One trader sold more than 20,000 January 26 puts for $1.99. Previous open interest was just around 700, so this is clearly a new trade. A put sale like this is a bullish play on X, suggesting the stock won’t close below $26 by January expiration.
What’s interesting about this particular trade is that the puts are actually in the money – not by much, but still ITM. The trader must have faith X is going to climb in the coming weeks. While risky, it does mean the puts have a hefty premium to collect.
Fortress Investment Group (FIG)
One strategist believes FIG could be moving higher in the coming months.
FIG, a small cap investment manager, is currently trading for $8.34. The shares are up a whopping 93% year-to-date. The stock’s also trading 129% above the 52-week low of $3.64 and 8% below the 52-week high of $9.10.
This week, a trader purchased 4,000 March 8 calls for roughly $0.85. The in the money call buying strategy suggests FIG will be moving higher over the next several months.
The trade itself isn’t unusual, just plain old call buying. However, it’s out of the ordinary in the sense that FIG is a small cap stock which averages 1,000 contracts traded per day. As such, a 4,000 block is a pretty big deal in this name.
More Options Ideas…
That wraps up this week’s unusual options trading and volume…
Keep in mind, there’s a lot more unusual options activity going on than what we discuss here.
We just try to bring you what we feel are the most significant ones– and the ones you might actually be able to make some money on!
So keep an eye on your email inbox… we have a lot more options trading ideas coming your way!
Yours in Profit,
Gordon Lewis
Category: Unusual Options Trading Activity
