Tesoro has been lining up for a rally, and now the bulls are
betting that the stock will take off this summer.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of almost 20,000 August 62.50 calls for $2.27 and the sale
of 13,700 November 57.50 calls for $6.30. Volume was below previous
open interest in the longer-dated contracts, which suggests that an
existing position was closed and rolled closer in time.
The adjustment is highly unusual because the trader shortened the
time horizon of the
while moving to a higher strike. He or she also increased the
number of contracts to maintain a
of roughly 880,000 and recovered $4 million of capital. That
reflects a belief the oil refiner will rally sooner rather than
later. If it doesn't, the new
position will become worthless. (See our
section for more on how time decay impacts option premiums.)
TSO is up 0.82 percent to $61.19 in afternoon trading. The stock
rallied sharply in October and November, then pulled back and
consolidated through last month. The technical picture improved
when the 30- and 50-day moving averages rose through the 100-day
line, and it's been climbing ever since.
Total option volume is already 10 times its full-session average,
according to the Heat Seeker, with calls outnumbering puts by more
than 35 to 1.
Fellow oil refiner
was also active today as an upside position in September was rolled
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