By Jud Pyle, CFA, chief investment strategist for the Options News Network

Investors are beginning to take a more bullish stance on

United States Steel

(X) - Get Report

.

Looking at the July 33 calls, around 7,300 contracts traded at roughly $2.40 per contract with the stock trading at $30.52. Heading into today's trading, open interest at this strike stood at just 800 contracts. In addition, more than 12,000 July 40 calls have traded today, crossing the tape at roughly 75 cents per share. There were about 20,000 July 40 calls already open earlier today. This is a bullish call spread that can illustrate how one could try to take advantage of potential upside in X.

At 11 a.m. EDT Tuesday, one investor bought 7,000 July 33-40 call spreads for $1.45. That means the customer bought the 33 calls and sold the further out-of-the-money 40 calls, paying $1.45 (net) for the transaction. The investor will be profitable at July expiration if United States Steel shares finish above $34.45 (the strike of the long call plus the premium paid).

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X reached a 52-week low on March 2, when the shares dipped to $16.88. Since then, the shares have nearly doubled in value. X shares closed at $29.94, up $1.41, or 4.94% on the day. X shares rallied today, along with other U.S. steel makers

AK Steel Holding

(AKS) - Get Report

and

Nucor

(NUE) - Get Report

, thanks in large part to analyst predictions that demand for steel will rise soon, as steel makers continue to report slight increases in weekly production.

Bullishness in United States Steel suggests investors could be betting that X shares will be advancing farther off the lows the company saw in March. We didn't see significant X volumes today compared to normal daily volume of around 36,000, but at least one investor is striking while the steel is hot.

Jud Pyle is the chief investment strategist for Options News Network and the portfolio manager of TheStreet.com Options Alerts. Click here for a free trial for Options Alerts. Mr. Pyle writes regularly about options investing for TheStreet.com.

Jud Pyle, CFA, is the chief investment strategist for Options News Network. Pyle started his career in finance in 1994 as a derivative analyst with SBC Warburg. After four years with Warburg, Pyle joined PEAK6 Investments, L.P., in 1998 as an equity options trader and as chief risk officer. A native of Minneapolis, Pyle received his bachelor's degree in economics and history from Colgate University in 1994. As a trader, Pyle traded on average over 5,000 contracts per day, and over 1.2 million contracts per year. He also built the stock group for all PEAK6 Investments, L.P. hedging, which currently trades on average over 5 million shares per day, and over 1 billion shares per year. Further, from 2004-06, he managed the trading and risk management for PEAK6 Investments L.P.'s lead market-maker operation on the former PCX exchange, which traded more than 10,000 contracts per day. Pyle is the "Mad About Options" resident expert. He is also a regular contributor to "Options Physics."