On Friday’s CNBC’s Options Action, the crew analyzed the performance of the commodities sector. The broad commodities index has been moving lower in 2017, but base metals have rallied over the same period. Alcoa, which is a large producer of aluminum has also rallied with base metals and recently broke above a bullish triangle. Additionally, Alcoa has been trading in a range for almost a decade and looks primed for a bullish breakout. Expecting a move higher, Michael Khouw suggested buying a Oct 41/46 Call Spread for a $1.70 Debit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: CNBC Options Action