United States Steel Attracts Bullish Bets From Options Traders Following Takeover Offer

United States Steel Corporation X shares rose sharply on Monday after the company rejected a $35 per share acquisition offer from Cleveland-Cliffs Inc. CLF.

On CNBC’s "Options Action,"  Mike Khouw of Optimize Advisors said United States Steel was one of the top 10 most active single stock options and traded more than 15x its average daily options volume on Tuesday.

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There were buyers of 22,000 of the August 35-calls at an average price of 20 cents per contract, Khouw noted.

Buyers are expecting United States Steel’s takeover deal to get done.

Over the weekend, Cleveland-Cliffs publicly announced that on July 28 it presented an offer to U.S. Steel's board to acquire 100% of the company for $17.50 per share in cash and 1.023 shares of Cleveland-Cliffs stock, representing a total consideration value of $35 per share.

U.S. Steel rejected the offer, calling it "unreasonable." As a result, Cleveland-Cliffs made the offer public and noted that it stands ready to engage if something changes.

Price Action: United States Steel’s shares jumped 36.8% to close at $15.98, while Cleveland-Cliffs shares gained 8.8% to $15.98 on Monday.

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