Cleveland-Cliffs Inc (NYSE:CLF) stock is down 3.5% to trade at $15.12 at last check, after J.P. Morgan Securities downgraded it to "neutral" from "overweight," and cut its price objective to $17 from $23. The analyst in coverage cited weak fundamentals, rising capital expenditure needs, and lack of near-term growth.
The brokerage bunch already leaned bearish on Cleveland-Cliffs stock coming into today, with eight of the 11 firms calling it a tepid "hold" or worse. Short sellers are firmly in control as well, with the 33.44 million shares sold short making up 7.2% of the equity's total available float.
The equity earlier slipped to its lowest level so far this year, and is on track for its seventh-straight loss. The 20-day moving average rejected rallies in May and June, contributing to CLF's 25.7% year-to-date deficit.
Drilling down to today's options activity, 4,873 puts have crossed the tape so far, which is triple the volume typically seen at this point. The most active contract is the weekly 6/14 12.50-strike put, where new positions are being sold to open.
Options are looking affordable, too. This is per the stock's Schaeffer's Volatility Index (SVI) of 34%, which ranks in the 15th percentile of its annual range, meaning options traders are pricing in low volatility expectations at the moment.
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