Options Trading News

December 11, 2012  Tue 5:16 AM CT

Phillips 66 has been lighting up our scanners for months, and buyers came back for more yesterday.

optionMONSTER's Heat Seeker tracking system showed heavy activity in the January 60 calls, with about 27,000 trading in volume well above the previous open interest of 3,841 contracts. The largest block priced for $0.70.

Long calls lock in the price where traders can buy shares, so these options can provide significant leverage when the stock goes up. But if the shares don't move, the calls will expire worthless. (See our Education section)

PSX closed at $53.58 yesterday, up 2.37 percent on the session and 67 percent in the last six months. As the refiners keep rolling, the beta trade has focused like a laser on a few specific names like this one.

Calls outnumbered puts by 46,000 to about 7,500, a reflection of yesterday's bullish sentiment.

(A version of this post appeared on InsideOptions Pro yesterday.)
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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