Some traders bet Alcoa to rise to $15 a share.
By Daniel at 7 October, 2009, 8:01 am
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“By Doris Frankel
CHICAGO, Oct 6 (Reuters) - Option speculators on Tuesday were betting aluminum producer Alcoa Inc (AA.N) would surprise Wall Street with better-than-expected quarterly results, triggering a rally in the shares.
The third-quarter earnings season will kick off with results from Alcoa on Wednesday after the bell.
Alcoa rose 3.5 percent to $13.89 in trading on the New York Stock Exchange.
Analysts on average are anticipating a loss of 10 cents per share, which would be the company’s fourth consecutive quarterly loss, according to Thomson Reuters IBES.
Based on the option activity, “investors are betting that the results would come in better-than-expected and that Alcoa may give positive guidance going forward,” said Scott Snyder, chief options strategist at TOS Advisors, a subsidiary of broker-dealer thinkorswim Inc.
He also said that some traders are betting the stock will move to $15 in the aftermath of the earnings report, a level not seen for a year.
Alcoa shares last closed above $15 on Oct. 7, 2008.”
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Link: http://www.reuters.com/article/marketsNews/idUSN0643258820091006
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