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Traders bet on Alcoa earnings

Options Action: Alcoa earnings preview
Options Action: Alcoa earnings preview

The release of Alcoa's results has traditionally kicked off earnings seasons for the market. And though the metals company is not as prominent as it once was, some are betting this former Dow component will see a pop after it reports on Wednesday.

On Tuesday, the stock saw twice its average daily options volume, with bulls slightly outnumbering bears. And one trade underscored investors' conviction that the stock will rise smartly when the company reports. Specifically, a trader bought 4,400 contracts of the 13.50-strike calls expiring on April 10 for about 30 cents. The bet is effectively a two-day wager that the stock will rise about 3 percent.

Such a move would be in line with what has happened to the shares in the recent past, even if it's more tepid than market expectations, notes options expert Mike Khouw, a CNBC contributor.

"This is a stock that typically moves about 3 percent on earnings," he said. "But the options market is implying a much-larger move of well over 4 percent this time."

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Read More Alcoa kicks off earnings season tonight ... or does it?

After an impressive 48 return in 2014, Alcoa has struggled this year as a strong dollar and a shaky global economy took its toll on commodities. The stock is down 14 percent year to date.

Nonetheless, Wall Street is anticipating improvements from last year. According to data compiled by FactSet, analysts are expecting Alcoa to report revenue of $5.94 billion and earnings of 26 cents per share compared to $5.45 billion in revenue and EPS of 9 cents in the first quarter of last year.

Alcoa is thought of as an aluminum company but alumina is under a quarter of its business. Last month, the company announced it would acquire RTI, a titanium supplier that sells primarily to the aerospace industry.

"Why is this a good deal? On the one hand, we are expanding our value-added business," CEO Klaus Kleinfeld told CNBC when the deal was announced. "Secondly, we are expanding it in an area, aerospace, that is high growth."

"We're becoming a titan in titanium," he added.