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It can be difficult to think of United States Steel as one of the stocks under $10 that could be overvalued, but this is exactly the sentiment of many industry experts. American manufacturing is just getting restarted in the wake of the coronavirus, and losses to the steel industry are expected to be substantial. U.S. Steel itself gave guidance that it expected to lose $315 million in Q2 2020. In spite of this, revenues for the company are increasing faster than its competitors. U.S. Steel is also taking unprecedented measures to adapt to the “new normal” of a post-COVID world. Capital spending will be reduced by $125 million, and plans to upgrade facilities in Gary, Indiana, are on hold until further notice. The company will also draw $800 from its credit lines to maintain operations.
How to Buy US Steel (NYSE: X) Stock and Options
If you believe in the return of American manufacturing and the reaction of U.S. Steel to COVID, there are many ways to get involved with the stock. You can purchase the stock directly, indirectly through industry-specific exchange-traded funds (ETFs) or leverage your money using derivatives.
You also need a reputable broker to avoid slippage and input errors in your investment execution. Let’s take a look at how you can choose a good broker to invest in U.S. Steel.
Pick a Brokerage
U.S. Steel is traded on the New York Stock Exchange (NYSE) and its status as an established stock over $5 (penny stock status) means that brokers can carry it without charging you an extra commission.
Its widespread access means you can focus your efforts on what the broker actually does for you rather than having to prioritize asset selection.
E*TRADE is an online discount trading house that offers brokerage and banking services to individuals and businesses. One of the first brokers to embrace online trading, E*TRADE not only survived both the dot-com bubble and Recession — it thrived. You can choose from two different platforms (one basic, one advanced). E*TRADE is a suitable broker for traders of most skill levels, whether you want to buy mutual funds and hold them for decades or dabble in options swing trading. E*TRADE offers a library of research and education materials to help you out.
- Active traders
- Derivatives traders
- Retirement savers
- Sophisticated trading platforms
- Wide range of tradable assets
- Exceptional customer service
- Limited currency trading
- Higher margin rates than competitors
- No paper trading on its standard platform
Interactive Brokers is a comprehensive trading platform that gives you access to a massive range of securities at affordable prices. You can buy assets from all around the world from the comfort of your home or office with access to over 135 global markets. Options, futures, forex and fund trading are also available, and most traders won’t pay a commission on any purchase or sale.
IBKR is geared primarily toward experienced traders and investors but now with the availability of free trades with IBKR Lite, casual traders can also acclimate to IBKR’s offerings.
- Access to foreign markets
- Detailed mobile app that makes trading simple
- Wide range of available account types and tradable assets
- Comprehensive, quick desktop platform
- Mobile app mirrors full capabilities of desktop version
- Access to massive range of tradable assets
- Low margin rates
- Easy-to-use and enhanced screening options are better than ever
- Beginner investors might prefer a broker that offers a bit more hand-holding and educational resources
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.
Webull is widely considered one of the best Robinhood alternatives.
- Active traders
- Intermediate traders
- Advanced traders
- Commission-free trading in over 5,000 different stocks and ETFs
- No account maintenance fees or software platform fees
- No charges to open and maintain an account
- Leverage of 4:1 on margin trades made the same day and leverage of 2:1 on trades held overnight
- Intuitive trading platform with technical and fundamental analysis tools
- Does not support trading in mutual funds, bonds or OTC stocks
Charles Schwab is a solid choice for traders of all skill levels. It offers full access to the U.S. equity and options markets as well as 30 international markets. Traders can create a diverse portfolio with $0 commissions and no account minimums. Schwab’s margin trading is expensive but Schwab makes up for it with affordable futures and options trades, along with a comprehensive mobile offering.
- 3 trading platforms perfectly in sync makes matching your platform to your skill level a snap
- Excellent futures trading education for new traders
- $0 account minimum means anyone can start trading
- Wide range of available assets to trade, including futures and 30 global markets
- SmartStreet Edge platform is powerful enough for advanced traders, yet easy enough for new traders to utilize
- Unique educational resources (like infographics and podcasts) make learning fun
- Margin rates are more expensive than competitors
- More limitations on available margin than competitors
- Expensive mutual funds
Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.
Get started right away by downloading Moomoo to your phone, tablet or another mobile device.
- Cost-conscious traders
- Active and Advanced traders
- Free Level 2 market data for all users who open an account
- Commission-free trading in over 5,000 different stocks and ETFs
- Over 8,000 different stocks that can be sold short
- $0 contract fee for trading options, no commission either
- Strong market data and analysis tools with over 50 technical indicators
- Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
- No minimum deposit to open an account.
- Active trading community with more than 100,000 app users
- No phone or chat support
TradeZero is an online broker and free stock trading platform that provides everything you need to successfully share and trade, including round-the-clock customer support. TradeZero provides four different trading state-of-the-art software programs with its services, a locator for sourcing shares for shorting, commission-free trades, and real-time streaming, to name a few of the features promoted on their website. The software is a unique and (potentially) affordable option for anyone interested in stock trading.
- Traders seeking high transparency and mobility in a stock trading program
- Those attracted to commission-free trades
- Those seeking a free version of a high-quality trading program
- 24/7 live customer support
- Uses ZeroWeb technology, a powerful level 2 online platform with direct market access
- Mobile app allows users to access stocks and trade in real-time while on the go
- Enforces Pattern Day Trading restrictions (accounts need to maintain a daily equity balance of at least $25k)
- Mobile app could offer more features
If you want to engage in the slightly more complicated investment strategy of buying options, here is guidance to help smooth the transaction.
Choose Strike Price
If you believe the price of U.S. Steel will rise in the future, you will be purchasing call options.
The first step in buying U.S. Steel call options is to decide on a strike price. Since you are buying options, not selling them, the premium you pay is a net debit to your account.
The strike price on the call option is the price at which you contract will execute on its expiration date. For instance, you buy a U.S. Steel call option at a strike price of $15. If U.S. Steel is at or above $15 on the day of expiration, you are contracted to buy 100 shares of U.S. Steel at $15 for every contract that you own. You have the ability to sell your option before the expiration date as well.
Strike prices are listed in your broker option lists under the ticker symbol X.
One call is the same as 100 shares of U.S. Steel stock. However, 1 options contract costs much less than 100 shares of U.S. Steel. Call options also gain or lose value exponentially compared to the value of the stock. If U.S. Steel goes up 1%, a call option may gain 10% in value.
Choose Expiration Date
The expiration date is the day of execution for your call option. On this day, the time value of your option will be 0. It may or may not have intrinsic value depending on the stock price.
You will see various expiration dates on your broker’s option chains. Pick your preferred date.
Decide How Many Contracts
After you choose your expiration date, enter the number of contracts you would like to buy. Remember that 1 contract controls 100 shares and the price of any option moves much more quickly than 1 share price.
Watch Stock Price
U.S. Steel is now one of the premarket movers that gains market attention because of the volatility in the industry. You can also buy shares in the premarket if you prefer. You will probably want to use a limit order in the premarket to avoid overpaying during this volatile time.
US Steel Stock History
The United States Steel Corporation was founded by titans of American business — Carnegie, Morgan, Schwab, et al. — and the stock has benefitted from that reputation since 1901. During slower periods of manufacturing in the nation’s history, the stock’s reputation and nostalgia helped it remain above penny stock status. In the late 20th century, the corporation diversified into petroleum, construction, real estate, shipbuilding, railroads, chemicals and mining. The stock hit an all-time high of $191.96 on June 25, 2008.
The coronavirus caused all-time lows in U.S. Steel and placed the company at a high risk of bankruptcy. It remains one of the most well-known stocks under $20 and faces downward pressure from environmentalists who believe in alternative methods for manufacturing.
Pros to Buying US Steel Stock
There are quite a few reasons to believe in U.S. Steel for the short and long term.
- Undervaluation: Although U.S. Steel has never been one of those penny stocks under $5, its stock price was hit hard during the coronavirus scare. With auto manufacturing and real estate picking back up, proponents of the company envision an uptick in business activity.
- Diversified interests: U.S. Steel has moved into many industries that are vertical to steel production, cementing its place in the supply chain for many businesses.
- Plenty of upside: The stock is currently trading around 50% of its 52-week highs.
Cons to Buying US Steel Stock
Despite the company’s reputation as a vital component in U.S. manufacturing, there are also many reasons not to touch U.S. Steel.
- A changing marketplace: Yes, U.S. Steel is an established brand. But so were J.C. Penney (OTC: JCPNQ), Chesapeake Energy (OTC: CHKAQ) and Whiting Petroleum (NYSE: WLL). The coronavirus is taking no prisoners, and some companies just won’t be able to survive the pressure.
- An inability to change: U.S. Steel is diversified, but the industry may be moving faster than the company. With newer, smaller competitors already investing heavily in automation and remote processes, U.S. Steel stands to falter if it cannot keep up.
- Low investor returns: Even in times of success, U.S. Steel was never the best company in terms of returning that money to investors. The stock traded around the same price in 1993 as it did in 2018, and the dividend yield has never been outstanding. Oh, and it tends to cut dividends at the first sign of trouble.
Latest News on US Steel Stock
Looking to stay up to date on U.S. Steel stock? Benzinga covers analysts ratings, earnings, news and more.
Latest WIIM: “U.S. Steel shares are trading higher. Strength appears related to positive macro sentiment after Trump signed orders extending coronavirus relief measures. Trump last week reinstated tariffs on Canadian aluminum, with the Ontario Premier expressing concern over potential steel tariffs next.”
As of late August. 2020, U.S. Steel raised their prices by $40 per short ton due to extended lead times causing a break in the supply chain. It’s speculated that prices will continue to rise by at least$10-$20 per gross ton by this month or next, concluding with a strong October.
The Portfolio of Steel
U.S. Steel has a storied name. You may have a chance to pick it up as a growth stock at its coronavirus price and ride it back to around $15 per share. Returns greater than that would come as a surprise to most analysts. With investors seeking newer ideas, U.S. Steel may be a company that doesn’t quite have the legs that it used to.
Turn to Webull
0 Commissions and no deposit minimums. Everyone gets smart tools for smart investing. Webull supports full extended hours trading, which includes full pre-market (4:00 AM - 9:30 AM ET) and after hours (4:00 PM - 8:00 PM ET) sessions. Webull Financial LLC is registered with and regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is also a member of the SIPC, which protects (up to $500,000, which includes a $250,000 limit for cash) against the loss of cash and securities held by a customer at a financially-troubled SIPC-member brokerage firm.