Oil refiner Phillips 66 hasn't been around for long, but the
bulls are already smitten.
Our tracking systems detected the purchase of 2,500 January 45
calls yesterday for $1.05 against open interest of just 157
contracts. Later in the session, a staggering 25,000 January 49s
were traded for $0.55 and $0.60 as the buying continued.
lock in the price
investors must pay to own a stock. They can generate major leverage
if it moves in the correct direction but also run the risk of
expiring worthless if no rally occurs.
Long-dated contracts such as the January PSX calls are especially
interesting because they grant exposure over several months,
eliminating the difficulty of purchasing several million shares.
PSX was down when the calls changed hands but rebounded and
finished the session up 0.96 percent at $40.15. The January 45s
appreciated more than 20 percent to $1.30 by the close.
The company was spun off from ConocoPhillips only in April. Some
tripled their money
in the name last month using August contracts.
Overall option volume in the name was 9 times greater than average
yesterday, with calls outnumbering puts by 66 to 1.
(A version of this post appeared on
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