tradeMONSTER: Trade free for 90 days

Options Trading News

February 1, 2013  Fri 5:15 AM CT

PSX: SEE CHART GET CHAIN FIND STRATEGIES
Traders have been extremely active in Phillips 66 for months, and the bulls were back yesterday.

optionMONSTER's Heat Seeker system detected heavy buying in the March 65 calls, with some 5,500 contracts trading against open interest of just 612 contracts. The first blocks priced for $0.90, but premiums then climbed to $1 as the activity heated up.

Those long calls have locked in a $65 entry price on the red-hot oil refiner for the next 1-1/2 months, no matter how high the stock goes. The trader stands to generate some nice leverage in the event of a continued rally, but the contracts can also become worthless if it doesn't move. (See our Education section)

PSX fell 0.31 percent to $60.57 yesterday but is up 85 percent since getting spun off from ConocoPhillips last May. It's been climbing along with other refiners as an improving economy draws investors to the energy sector. Profit also beat expectations when the company reported earnings on Wednesday.

Total option volume was slightly above average in the name yesterday, with calls outnumbering puts by a bullish 4-to-1 ratio.

(A version of this post appeared on InsideOptions Pro yesterday.)
Share this article with your friends


Related Stories

PSX

Trader sees Phillips 66 in range

December 5, 2014

A put seller is apparently betting that the oil refiner will remain in a range that has been in place since the beginning of October.

tradeMONSTER: Trade free for 90 days

Premium Services

Archived Webinar

The Art of Trading: Forgiving the Spread

Education & Strategy

Know thy Greeks!

One of the most important roles played by the Option Pricing Model is the calculation of an important family of...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER