OptionsHouse

Options Trading News

October 23, 2013  Wed 5:16 AM CT

TSO: SEE CHART GET CHAIN FIND STRATEGIES
Tesoro lit up our scanners yesterday as energy names continued to draw aggressively bullish option action.

Last Thursday the oil refiner saw buying in the November 49 calls for $1.12, and now that winning trade is being rolled forward after the stock has surged. optionMONSTER's Heat Seeker system shows that a trader sold 7,500 contracts for $2.95 and bought 8,545 December 55 calls for $1.60.

Long calls lock in the price where the stock can be purchased, letting investors benefit from a rally for just a fraction of the cost of the shares. These options can also generate significant leverage, which is exactly what occurred as those November calls more than doubled in less than a week. Yesterday's roll keeps the investor in the trade for another month, so he or she is definitely looking for more gains. (See our Education section)

TSO rose 1.16 percent to $49.52 yesterday and has been running along with peers such as Valero Energy and HollyFrontier. Option activity has been leading the move and accelerated throughout October.

More than 30,000 contracts traded in the Tesoro, compared with fewer than 13,000 in a typical session. More than 27,000 of those were calls versus less than 2,700 puts.

Disclosure: I own TSO calls.

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


Related Stories

TSO

Tesoro puts follow bearish momentum

January 13, 2016

Traders are positioning for more downside potential in the oil-refining company, which is scheduled to report earnings after the close on Feb. 1.

OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »