OptionsHouse

Options Trading News

December 28, 2012  Fri 4:45 AM CT

VLO: SEE CHART GET CHAIN FIND STRATEGIES
Valero is not far from its highs of the year, and one trader is looking for more gains in the oil-refining company.

optionMONSTER's Heat Seeker tracking system detected the purchase of 3,000 January 36 calls in a single print for $0.31 yesterday. This is a new position, as the volume was above the strike's open interest of 2,564 contracts before the session began.

VLO rose 0.45 percent yesterday to close at $33.83. Shares had gone on a scorching run from $20 to its 52-week high of $34.49 from early June to mid-September, then pulled back to support at $28 before resuming its climb.

Yesterday's long calls, which lock in the price where traders can buy the stock, are looking for VLO to rise roughly 9 percent in the next three weeks. If the shares are below the $36 strike price at that time, the calls will expire worthless. (See our Education section)

Overall calls in the name outnumbered puts by nearly 4 to 1.
Share this article with your friends


OptionsHouse

Premium Services

Archived Webinar

Education & Strategy

Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

View more education articles »