Phillips 66 has run into overhead resistance after a scorching run higher, but traders are betting that the rally will resume.
A trader bought 12,000 January 50 calls in a single print for $1.60 and sold two blocks of 6,000 January 55 calls for $0.60 and $0.65, according to optionMONSTER's Heat Seeker tracking system. There was straight call buying in the November 49 strike as well.
The January bullish call spread, which cost about $1 to establish, is looking for the stock to rally by expiration early next year. The independent energy and chemical company, which was spun off from Conoco in April, will release third-quarter earnings results on Oct. 31. (See our Education section)
PSX gained 4.75 percent yesterday to close at $46.49, bouncing off its 50-day moving average after drifting lower this month. The stock came into June trading below $30 and ran all the way to a 52-week high of $48.22 on Sept. 14, with bullish option activity lighting up the Heat Seeker repeatedly along the way.
Total option volume in the name yesterday was more than 6 times its daily average. Calls outpaced puts by 23 to 1.
(A version of this post appeared on InsideOptions Pro yesterday.)
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