Tesoro bulls try to pump more gains

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Tesoro has been exploding higher, and one bull is looking for even more upside.

optionMONSTER's Heat Seeker tracking program detected the purchase of 3,750 December 17 calls for $0.66, less than one minute after 3,479 December 15 calls were sold for $2.19. Volume was below open interest in the 15s, suggesting a long position was rolled to the higher strike.

TSO TSO rose 3.21 percent to $17.35 in early afternoon trading and is up 34 percent in the last month. The oil refinery sector has been one of the strongest in the market recently after lagging for most of the post-crisis rally.
Companies are now reaping the benefits of reduced capacity at the same time that demand rebounds, which is driving margins wider and boosting profits.

Tesoro has been the object of several bullish trades recently: On Nov. 22 Heat Seeker detected the purchase of a December 16/18 call spread for $0.50, which has now more than doubled to $1.12. And Jon noted buying yesterday in the December 18s outright, and those are higher by more than 60 percent today.

Today's trade lets the investor receive a credit of about $1.50 while leaving exposure to further upside. It also increases the position's gamma to 32 from 6, which will increase leverage if the shares continue higher. (See our Education section)

Overall option volume in the stock is 6 times greater than average so far today, with calls outnumbering puts by 7 to 1.

(Chart courtesy of tradeMONSTER)



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Options

Referenced Stocks: TSO

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