Steel Dynamics Stock Looks Poised for Strong Q1 Gains

The new year is already off to a strong start, with both the Dow Jones Industrial Average (DJI) and S&P 500 Index (SPX) with fresh record closes under their belts. For investors looking to keep up this momentum in the first quarter, Senior Quantitative Analyst Rocky White composed a list of the best 25 stocks to own during this period.

Though Steel Dynamics Inc (NASDAQ:STLD) stock doesn't top the list overall, it leads in terms of largest percentage gains. The security finished the first quarter higher in eight of the last 10 years, with an average 16.6% pop, snubbing out competitor Nucor (NUE).

At last glance, STLD is down 2.3% to trade at $168.63, after BlueScope Steel rejected the company's joint $8.92 billion buyout offer with SGH. The shares still boast a 41.3% year-over-year lead, and remains within striking distance of its Dec. 23, record high of $178.36. The 40-day moving average also looks positions to contain any additional losses.

Options traders lean extremely bullish toward the steel stock. This is per STLD's 50-day call/put volume ratio of 3.25 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 79% of annual readings.

It's also worth noting that near-term option traders are currently pricing in low volatility expectations. This is per the stock's Schaeffer's Volatility Index (SVI) of 39% stands in the 20th percentile readings from the past year.