In case you missed the big news after the close on Monday, Alcoa (AA: sentiment, chart, options) announced that its first-quarter profit dropped to $303 million, or 37 cents per share, from its year-ago profit of $662 million, or 75 cents per share. Excluding items, earnings from continuing operations would have been 44 cents per share, missing the Street estimate of 48 cents per share. Revenue during the quarter dropped 6.7% to $7.38 billion. The consensus estimate was for sales of $7.2 billion.

Meanwhile, this morning Soleil Group analyst Charles A. Bradford boosted his second-quarter profit target for AA to 65 cents per share from 45 cents per share based on the rising cost of aluminum. Bradford said in a note that "We believe that the increased aluminum prices are due to two non-economic factors: the worst winter weather in 50 years in China, and a long-term power shortage in South Africa." He added that "In both cases, primary aluminum production has dropped, but so has the growth in likely aluminum consumption." He sees prices normalizing in the near future.

The shares of AA are down less than 1% this morning following its earnings report. However, it appears that the equity is holding support at its 10-day and 20-day moving averages in the 37 region. Additional support in the form of the security's rising 10-week trendline is in the area, helping to buoy the shares as well.

In early trading this morning, the stock has seen a number of calls cross the tape. Both the April 40 and 37.50 calls have seen more than 2,000 contracts trade for each. Of course, this is just a drop in the bucket compared to the open interest for each strike. The out-of-the-money April 40 call has more than 41,400 contracts in open interest while the April 37.50 call has open interest of roughly 37,000 contracts.

Put trading hasn't been as heavy so far. The April 35 put has seen the most action, with fewer than 1,200 contracts changing hands.