By David Russell, reporter at OptionMonster
NEW YORK -- Mechel (MTL) is attracting long-term bullish trades as the Russian steelmaker tried to hold long-term support levels.
OptionMonster's scanners detected the purchase of almost 5,700 January 2014 10 calls, most of which priced for 75 cents and 80 cents. The activity dominated Tuesday's option volume in the name, which normally trades barely 200 contracts per session.
Calls lock in the price where investors can buy the stock, so they can generate significant leverage in the event of a rally. Tuesday's buying was a bit unusual because those calls don't expire for more than a year, so they're definitely taking a long-term view.Mechel's shares rose 1.15% to $6.14 Tuesday. The stock has been clinging to three-year lows around $6 since May. Its chart is similar to that of most other steel and coal companies, which have attracted increasingly bullish trades as China's economy recovers. Calls outnumbered puts by a bullish 168-to-1 ratio in the session, according to OptionMonster data. Russell has no positions in MTL.