Traders are buying CLF Jan06 weekly 10 calls for .04. ?These options are 20% out of the money with just a week to expire.
Cliffs Natural Resources Inc., trading at 8.47 with an IV30 of 77.86 and an HV10 of 55.30, is seeing aggressive call action today.? Traders are buying the Jan06 (1st week) weekly 10 calls for .04. ?This stock has an ADV of 30,000 and an OI of 570,000.? ?These options are 20% out of the money with just a week to expire.? They have been purchased via small block intermarket sweep buys.? On the day 10437 of these calls have been bought against open interest of just 8882.
This appears to be a customer that is chasing option premium in CLF.? The trader is paying .04 a lottery ticket price for these calls paying .04, but if CLF does pop 20% or more these could be an absolute homerun.? An interesting piggy back is to buy the Jan6 9.5s for just .05 or .06 (just 1 or 2 cents more).
This trade is aggressively bullish the underlying and volatility.