Alcoa Corp (NYSE:AA) stock is 1.9% higher to trade at $41.27 this morning. The aluminum producer reported adjusted third-quarter earnings of $1.82 per share on $3.7 billion in revenue. The former topped estimates, while revenue fell short of expectations. Alumina pricing and demand look promising, per CEO William Oplinger, thanks to data center buildouts and AI infrastructure growth.
The stock needed the post-earnings pop. The shares have tested $40 this week, and have taken a 52% haircut off their June 2 four-year peak of $84.31. Year-to-date, AA is down 22%, but is 13% higher year-over-year.
Options traders have been more bearish than usual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and Nasdaq OMX PHLX (PHLX), Alcoa's 10-day put/call volume ratio of 0.59 ranks in the 90th percentile of its annual range. Though calls are still winning out on an absolute basis, puts have been more popular than usual. Today, the October 42 call expiring at the close leads the charge, while the December 55 call also sees some attention.
Options could be affordable soon in a post-earnings volatility crush. AA's Schaeffer's Volatility Index (SVI) of 48% that ranks in 13th percentile of its annual range. Plus, with a Schaeffer's Volatility Scorecard (SVS) of 84 (out of 100), the stock has a history of exceeding option trader's volatility expectations during the past year.
