The markets are taking off again today, and so too are the unusual call option buys. One very large call buy that caught our attention today was in Nucor Corp (NUE).
One big trader just bought 7,591 October $52.50 calls in Nucor Corp (NUE) in an opening trade. Interestingly, the buyer got more than half of them at the bid.
Nucor Corp (NUE) is currently trading at $52.04, up $1.00 as we head into the lunch hour. NUE is trading pretty much average volume of 831,000 shares so far today. NUE has a fairly tight trading range over the past year, with a 52 week low of $45.32 and a 52 week high of $54.73. This one trader clearly thinks it’s NUE’s time to break out of that range. And he expects it to happen fairly soon.
Nucor Corp (NUE) is set to announce quarterly earnings on October 15, before the market opens. While it’s possible this call buyer is “anticipating” stellar numbers from the steel manufacturing company, it seem highly unlikely. These call buyers don’t operate long term, so expect some news from the company, or more likely, some news from an investment firm about an upgrade and / or price target increase.
A total of 20 analysts cover the stock with an average rating of Overweight, and an average price target of $54.56. It could very well be this buyer is in the know about an impending upgrade and or price target raise. By in the know, we mean they are the analyst about to announce the upgrade.
There appears to be plenty of room for a price target increase. We’ll go out on a limb and guess that Deutsche Bank will upgrade this week or next, or possibly Credit Suisse.