AK Steel led a sharply rally in the industry this afternoon, resulting in exponential gains on upside option positions opened earlier this week.
Just Tuesday, Investitute’s market scanners detected the purchase of 9,800 July $6.50 for $0.10 to $0.13 with shares at $6.15. Volumes was well above the strike’s open interest of 6,288 contracts, indicating that this was fresh buying.
Those calls traded up to $0.44 today, more than tripling in value less than three full sessions after they were purchased. The stock gained 9.43 percent in the same time frame, illustrating the kind of leverage that can be achieved through options.
Long calls lock in the price where the stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.
AKS jumped 7.1 percent to $6.64 today. The company posted the strongest gains among U.S. steel makers, which surged after President Trump said he would consider tariffs and quotas on imports of the metal.