Gerdau is a Brazil-based steel manufacturer that has seen its shares hit, hammered, crushed — pick your adjective.
Trading in the mid-$20s last summer, GGB has fallen some 25 percent just in the last week or so.
But as shares traded around $6.47 this morning, someone goes out and buys 8,200 March 12.50 calls for $0.10. Now why in God's name would anyone believe GGB would double in the next 59 days?
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It makes no sense that a short would buy the 12.50s to cover their upside. The only logical thesis I can put forward is that someone believes this stock could be acquired.
Disclosures:
I now have positions in GGB.
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Other Global Steel Giants:
Companhia Siderurgica Nacional
Arcelor Mittal
U.S. Steel
Nucor
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Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.com.
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