Unusual Options Activity Suggests the Smart Money Is Bullish About Rio Tinto Stock Despite Glencore Deal Collapse
Why it matters: Unusual call option activity signals investor confidence in Rio Tinto's solo future despite a major deal collapsing.
- Rio Tinto (RIO) saw its options volume skyrocket to 1.29 million, 17 times its 30-day average, with 40 of the top 100 Vol/OI ratios being RIO calls, signaling strong bullish sentiment.
- Rio Tinto officially ended its pursuit of Glencore (GLNCY) after failing to agree on valuation, with Glencore demanding 40% of the combined entity, a premium Rio Tinto deemed too high.
- UK rules now prevent Rio Tinto from re-engaging with Glencore for at least six months, though Jefferies analyst Christopher LaFemina suggests a future re-engagement is not their base case, expecting Rio Tinto to 'go it alone.'
Despite the collapse of Rio Tinto's bid for Glencore, unusual options activity suggests 'smart money' is bullish on Rio Tinto stock. Options volume for RIO surged to 17 times its average, with an overwhelming dominance of call options, indicating institutional investors anticipate a rise in its share price.
