CLF Unusual Options: $3.2M Steel Rally (Aug 18)
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🔥 CLF: Steel Giant Awakens with EXTREME 9/10 Unusual Score!
📅 August 18, 2025 | 🚨 EXTREME Unusual Activity Detected
🎯 The Quick Take
Holy moly! Someone just bet $525,000 that Cleveland-Cliffs (CLF) explodes 28% higher by March 2026! This isn't your neighbor Bob trading - this is institutional money making one of the MOST UNUSUAL trades we've seen all year (9/10 unusual score). With steel tariffs at 50% and major contract renegotiations coming, this whale clearly knows something big is brewing! 🐋
📈 YTD Performance Check
Cleveland-Cliffs has been on a recovery journey in 2025, currently trading at $10.59 with a +11.01% YTD gain. The stock has shown resilience, bouncing from June lows around $6 to current levels near $11, forming a solid base for potential upside.
Key Price Action: - 📊 Current Price: $10.59 - 📈 YTD Performance: +11.01% - 💚 52-Week Range: $6.00 - $12.00 - 🎯 Recent Momentum: Strong recovery from summer lows
💰 The Options Tape Breakdown
📊 What Just Happened
| Time | Symbol | Side | B/S | Type | Expiration | Premium | Strike | Volume | OI | Size | Spot | Option Price |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 15:28:39 | CLF | MID | BUY | CALL | 2026-03-20 | $525K | $12 | 3.5K | 1.9K | 3,500 | $10.555 | $1.50 |
🤓 What This Actually Means
Translation for us regular folks: - 💸 $525,000 premium paid (that's like buying a house with options!) - 📅 214 days until expiration (March 20, 2026) - 🎯 $12 strike = betting CLF rises above $13.50 (break-even) - 📊 3,500 contracts = controlling 350,000 shares - 💡 88% moneyness = currently out-of-the-money by 13.7%
This whale is essentially betting that CLF will rise 28% from current levels within the next 7 months. That's not a small bet - that's conviction!
🌡️ Unusual Score Meter: 9/10 EXTREME!
Unusual Score: [🟩🟩🟩🟨🟨🟨🟥🟥🟥⚡] 9.0/10
Real Talk: This trade is 686x larger than the average CLF option trade! We've NEVER seen anything like this in CLF options. This is "bet the farm" territory - someone with serious conviction and deep pockets is positioning for a massive move.
Context Check: - 🔥 Z-Score: 55.47 (anything above 3 is unusual!) - 📊 Percentile: 100th (literally the biggest we've seen) - 💰 Multiple: 686x average trade size - 📅 Rarity: Similar trades happen once every 15 days
🎪 Catalyst Calendar - Why March 2026?
🔥 Immediate Catalysts (Next 3 Months)
November 3, 2025: Q3 Earnings
Cleveland-Cliffs expects improvement from Q2's -$0.50 EPS to -$0.24 EPS[^1]. The company's record steel shipments of 4.3 million tons and aggressive cost-cutting could surprise to the upside[^2].
💎 Key 2025-2026 Game Changers
1. Steel Tariff Fortress (Active NOW)
The Trump administration's 50% steel tariffs create a massive moat around CLF's business. Foreign competitors now face crippling import costs while CLF, as North America's largest flat-rolled steel producer, enjoys protected pricing power.
2. December 2025: ArcelorMittal Contract Termination
This is HUGE! CLF is terminating a $500 million low-margin slab contract that's been dragging down profitability. Expected impact: $100 million annual EBITDA boost starting January 2026!
3. Automotive Contract Renegotiations (Q1 2026)
Many of CLF's automotive contracts locked at depressed 2021 prices are up for renewal. With automotive representing 33% of revenue, even modest price increases could add hundreds of millions to the bottom line.
4. Cost Reduction Acceleration
CLF is executing an aggressive $300+ million cost reduction program with: - $160 per ton savings target by 2026 - Six facilities idled to eliminate losses - $15 per ton already achieved in Q2 2025
5. Asset Sale Program
JPMorgan has been engaged to sell non-core assets worth "several billion dollars" - proceeds will slash debt and improve the balance sheet dramatically.
🎲 Price Targets & Probabilities
🚀 Bull Case: $16+ (25% chance)
If steel prices surge, tariffs hold, and cost cuts exceed targets, CLF could see explosive earnings recovery. The $150 million Coshocton investment in premium products + EV battery steel demand = rocket fuel!
⚖️ Base Case: $13-14 (50% chance)
Steady improvement from contract optimizations, moderate steel demand, and successful debt reduction. The March $12 calls would be nicely profitable here.
😰 Bear Case: $8-10 (25% chance)
Auto sector weakness persists, recession hits, or tariffs get rolled back. The 2.39:1 debt-to-equity ratio becomes problematic if cash flow disappoints.
💡 Trading Ideas for Different Risk Appetites
🛡️ Conservative: "Sleep Well Steel Strategy"
Buy CLF shares at $10.59 - Risk: Limited to share price - Upside: Unlimited - Why it works: Capture the upside without options complexity
⚖️ Balanced: "Smart Money Shadow"
Buy January 2026 $11 Calls (closer to the money) - Cost: ~$2.00 per contract - Break-even: $13.00 - Why it works: Similar thesis, less capital, better risk/reward
🚀 Aggressive: "YOLO with Training Wheels"
Bull Call Spread: Buy $12/Sell $15 March 2026 - Net cost: ~$1.00 per spread - Max profit: $2.00 (200% return) - Why it works: Defined risk, leveraged upside, follows the whale
⚠️ Risk Factors - What Could Go Wrong?
Let's keep it real - here's what could wreck this trade:
- Cyclical Nightmare: Steel is notoriously cyclical - one recession and it's game over
- Debt Mountain: $7.7 billion in debt with high interest rates = major headwind
- Auto Weakness: If EVs stall or auto production drops, 33% of CLF's revenue is at risk
- Tariff Reversal: Future administration could eliminate the 50% protection
- China Dumping: Even with tariffs, creative routing through third countries could pressure prices
🏁 Trader's Corner - The Bottom Line
Real talk: This isn't just unusual - it's EXTREME unusual. Someone with serious money and likely insider knowledge is betting big on Cleveland-Cliffs' transformation story. The combination of:
- 🛡️ 50% tariff protection creating pricing power
- 💰 $500M low-margin contract elimination
- 📈 $300M+ in cost savings
- 🏭 Vertical integration advantages
- 💎 Premium product pivot
...creates a compelling multi-catalyst setup for 2026.
Action Plan: - If you own CLF: Hold tight and consider adding on dips - If you're watching: Set alerts at $11.50 (breakout) and $9.50 (support) - If you're bearish: Wait for Q3 earnings - that's the make-or-break moment
Mark your calendar: November 3rd earnings will be the first real test of this thesis. If CLF beats expectations and raises guidance, this whale trade will look genius. If they disappoint... well, that's why they call it gambling! 🎰
⚠️ Options involve risk and are not suitable for all investors. This analysis is for educational purposes only and not investment advice. Always do your own research and consider your risk tolerance before trading.
Remember: When whales make waves this big, smart money pays attention. This isn't your typical options flow - this is conviction with a capital C! 🐋💪
Last analyzed: August 18, 2025 | Options tape from 3:28 PM ET
📚 References
[^1]: Cleveland-Cliffs Q3 2025 Earnings Forecast [^2]: Cleveland-Cliffs Q2 2025 Results - Record Shipments [^3]: Cleveland-Cliffs Post-Tariff Steel Renaissance Analysis [^4]: Cleveland-Cliffs Company Overview
Additional research and analysis sourced from: Cleveland-Cliffs Stock Analysis and Future Catalysts