Tuesday, October 6, 2009

Alcoa Sees Elevated Options Trading Before Earnings (AA)

Alcoa, Inc. (NYSE: AA) is trading up 4% at $13.97 today ahead of tomorrow’s earnings.  At 3:20 PM EST we have seen some 34 million shares trade hands, which is only an average day’s trading volume.  But we are seeing elevated call option trading ahead of tomorrow’s earnings report.  Here is the volume and open interest data for the selected OCT-2009 CALL and PUT strike prices:

CALLS    Volume    OpInt.
$14.00    28,328    56,582
15.00    10,049    55,084
16.00    12,852    6,745

PUT$    Volume    OpInt.
$12.50    12,469    25,712
$14.00    6,782    18,141

It is assumed that the bets are that the company is finally on the path to resuming earnings, and the notion that gold is soaring has put a bid in under the rest of the major metals companies.

JON C. OGG


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