Investors are taking a more bullish stance on United States Steel (NYSE: X, Stock Forum).
Looking at the July 33 calls, around 7,300 contracts traded Monday for around $2.40 with stock at $30.52 versus current open interest of 800. In addition, more than 12,000 July 40 calls traded yesterday at 75 cents versus current open interest of almost 20,000. This is a bullish call spread that shows you how to take advantage of potential upside in X.
At 11 a.m. EDT Monday, one investor bought 7,000 July 33-40 call spreads for $1.45. That means the customer bought the 33 calls and sold the 40 calls and paid $1.45 for the transaction. The investor will be profitable if X shares expire above $34.45 come July expiration.
X reached a 52-week low on March 2, when the shares dipped to $16.88. Now, these shares are currently trading for almost 100% higher. X shares closed yesterday at $29.94, up $1.41 on the day. X shares inched up, along with other U.S. steel makers AK Steel Holding and Nucor, because of analyst predictions that demand for steel will rise soon as steel makers continue to report slight increases in weekly production.
Bullishness in X suggests investors could be betting that X shares will be moving farther up from the lows the company saw in March. We didn’t see significant X volumes Tuesday compared to normal daily volume of around 36,000, but at least one investor is striking while the steel is hot.