Cliffs Resources (CLF), the Cleveland, OH steel and iron company, is trading up 34 cents to $43.89 and options action is heating up in the stock ahead of earnings. The company is due to report after the closing bell. 14,000 calls and 2,710 puts traded in the name. November 46 calls are the most actives. 3,652 traded, including a 467-lot for $1.50 on ISE; which is a closing buyer, according to ISEE data. However, the Weekly 45, 45.5 and 47.5 calls are seeing opening activity ahead of the news and well over half of the flow is trading at the offer, suggesting buying interest in the upside calls on CLF. Short interest might be driving some of the flow. Short (as percent of float) ratio in the stock was 19.4 percent at the end of September. CLF fell 6.3 percent on 7/26 when earnings were last repoted, but is up 13.7 percent since that time. The stock is also well off the 2012 highs of almost $79 per share seen in late-January. (Note that there is unsubstantiated chatter that CLF has hired Deutsche Bank as adviser — Benzinga — and that might be motivating some of the call activity as well).
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.