>>The cost of bullish options on Cliffs Natural Resources Inc. rose to an all-time high amid speculation that shareholder activism can revive the second-worst performer in the Standard & Poor’s 500 Index in 2013.
Calls betting on a 10 percent rally cost 0.36 point more than puts protecting against a 10 percent drop in Cliffs shares, according to three-month data compiled by Bloomberg. Bullish options traded at 1.06 point above bearish contracts on Feb. 10, the most expensive on record. The stock has rallied 9 percent since Jan. 28, paring a retreat for the year to 18 percent.
The stock tumbled 32 percent in 2013, prompting shareholder Casablanca Capital LP to urge the biggest U.S. iron-ore producer to spin off foreign assets and double its dividend. Cliffs, which may report its strongest quarterly earnings growth since 2011 tomorrow, is poised for a rebound if metal prices recover, according to Tom Winmill of Midas Funds.
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