Option traders flocked to Aug 15, 2014 expiration call options driving premiums massively higher after shares in U.S. Steel Corp. (NYSE:X) surged to an 18-month high.
At the time of this writing, shares in the steelmaker have surged by 18.3% to $32.70 with early call option buyers snapping up more than 7,000 bullish contracts on the stock. Calls expiring in two weeks had been trading at no higher than 40 cents in the past two weeks.
Ahead of Tuesday’s earnings report, bullish wagers in the 30.0 strike calls held by option traders stood at 8,120 lots as represented by open interest. Traders watching the shares surge following reports of a profit instead of an expected loss saw the option premium offered at $1.05 at the outset before vaulting to $3.16 (an increase of +3,176%).
The Aug 15, 2014 30.0 strike call option was the most popular series on Wednesday in the opening hour of trading contributing to 17% of overall volume of 38,000 contracts. Open interest across all options held in US Steel is 506,000 contracts according to exchange data.
Chart – 18-month high for shares in US Steel