Upside option activity in Gerdau lit up our screens as the Brazilian steel company prepared to make a presentation today at the Goldman Sachs 5th Annual Global Steel Forum.
Traders were focused on the January 17.50 calls, where 8,251 contracts were bought for $0.85 and $0.90, according to OptionMonster's real-time tracking systems. That volume was well over the open interest of 3,319 contracts and dwarfed the average turnover of just 33 calls per day at that strike.
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Overall calls at all strikes totaled 9,813 compared with a grand total of 40 puts traded in the name yesterday, a further bullish indication. Gerdau is the world's second-largest maker of long steel, and infrastructure growth is surging in Brazil.
Gerdau closed yesterday at $17.02, up 2.47 percent on the session. The stock has been in a mostly steady uptend since its 52-week low of $4.63 in early March, though it has recently hit resistance around $17 and may be ready for another leg up.
The stock would need to rise roughly 8 percent or more by expiration for the January 17.50 calls to turn a profit.
Gerdau Competes With:
Companhia Siderurgica Nacional
United States Steel
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