4:45pm (EST)

Alcoa (AA, $7.79, down $0.12) posted a wider-than-expected loss after the bell when it reported it lost 59 cents a share. Wall Street was expecting a loss of 56 cents. However, the company did beat on the revenue side when it posted $4.1 billion versus expectations of $4.08 billion.

The company cited weak demand for the loss and sharply lower prices. The auto industry’s woes were a big part of the problem but in after-hours trading the stock is actually up a few pennies.

The price of aluminum has fallen over 50% from a peak of $3,380 per ton last July to today’s price of $1,460. Weak demand and lower prices do not add up to profits most of the time and this is the second straight quarter Alcoa has missed.

We are eye-balling the May 7.50 calls (AAES, $1.21, down $0.01) as a possible play going into Wednesday morning’s opening bell but it’s hard to say where the stock will open. We were hoping for a sell-off when trading started in the morning but if we don’t get one in after-hours trading that probably means Alcoa is safe.

Either way, we will have to see where we open on Wednesday but chances are I will probably avoid the trade. The market is closed on Friday and that will zap some time premium off when the option market opens on Monday.

Rick Rouse