This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bulls Think Nothing Can Stop Steel Dynamics

By David Russell of OptionMonster

NEW YORK -- Steel Dynamics (STLD) has been ripping, and the bulls think it will keep running into early 2015. 

OptionMonster's tracking systems detected the purchase of about 1,400 February 24 calls for 50 cents and 2,100 February 22 calls for $1.25 and $1.30. Volume exceeded open interest at both strikes, which indicates new money was put to work on the long side.

Calls lock in the price where investors can buy a stock, allowing them to control a rally with limited cost. They can also generate significant leverage if shares move in the right direction. 

Steel Dynamics rose 0.33% to $21.51 on Wednesday, and is up 17% in the last month. Most of that move came after quarterly revenue beat expectations and the company bought domestic steel plants from Russia's Severstal in late July. It's also back above its 2011 high, so Wednesday's trader was looking for the stock to retrace its big drop in 2008.

It was additionally noteworthy that he or she calls at two strikes. They can later sell more contracts in the middle if they want to create a so-called butterfly spread.

Total option volume was twice the daily average in the session, with calls outnumbering puts by 73 to 1.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.09 -0.16%
FB $117.42 -0.33%
GOOG $703.68 0.32%
YHOO $36.95 0.03%
TSLA $211.22 -0.15%


Chart of I:DJI
DOW 17,648.59 -12.12 -0.07%
S&P 500 2,048.45 -2.18 -0.11%
NASDAQ 4,714.6390 -2.4550 -0.05%

Free Reports