Steel producer Cleveland Cliffs (CLF) slid over 45% in the past year, as low-cost global steel operators have been more profitable in today’s environment. One trader sees a massive bounce higher by year-end.
That’s based on the December 2025 $15 calls. With 311 days until expiration, 55,830 contracts traded compared to a prior open interest of 2,301, for a 24-fold rise in volume on the trade. The buyer of the calls paid $0.90 to make the bullish bet.
Cleveland Cliffs shares traded just over $10, so the stock would need to rise by nearly $5, or 50%, for the option to move in-the-money. The option strike price is well under the stock’s 52-week high of $22.97.
The steelmaker has struggled, with revenues down by nearly 20% in the past year, and with no earnings growth. Plus, total debt rose over 50%.
Action to take: Some traders see domestic producers faring well later this year as potential tariffs kick in. If that’s the case, then Cleveland Cliffs could fare well, although not for improving fundamental reasons. Investors may want to stand aside for now.
Traders looking for a way to bet on rising tariffs in general may want to consider a trade like the December $15 calls.
While far out-of-the-money, they could deliver high double-digit returns or better depending on any actual tariff plan playing out. And they’re inexpensive enough that if nothing happens with tariffs, the loss will be small.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.