Options Brief: Alcoa (AA)

AA – Alcoa, Inc. – Shares of the aluminum manufacturer are up 8.10% to stand at $12.01 as of 12:15 pm (ET). The rally in the price of the underlying stock inspired bullish call buying across several expiries. Near-term optimists are positioning for continued upward momentum in Alcoa’s shares by purchasing at least 9,400 now in-the-money calls at the July $12 strike for an average premium of $0.41 apiece. Investors buying calls outright at the July $12 strike are prepared to profit if the aluminum maker’s shares gain another 3.33% to trade above the average breakeven price of $12.41 by July expiration day. Bulls also purchased approximately 6,600 calls at the higher July $13 strike for an average premium of $0.17 each. Alcoa’s shares must rally 9.65% from the current price of $12.01 before July $13 strike call buyers make money above the effective breakeven point at $13.17. Finally, the July $14 strike enticed options optimists to purchase roughly 1,000 calls for an average premium of $0.05 each. Call buying behavior spread to the October $14 strike where some 5,300 calls were picked up for an average premium of $0.39 per contract. Investors long the calls make money only if Alcoa’s shares surge 19.8% to trade above the average breakeven price of $14.39 ahead of October expiration.