Tesoro means "treasure" in Spanish, and one bull is looking to
optionMONSTER's Heat Seeker tracking system detected the purchase
of about 4,000 December 16 calls for $0.58 and the sale of a
matching number of December 18 calls for $0.08, resulting in a cost
of approximately $0.50. Volume was more than 3 times open interest
in both strikes.
TSO is up 3.69 percent to $15.74 in afternoon trading and is up 38
percent in the last three months. The oil refiner has been charging
higher along with other companies in the sector as margins improve
and demand rebounds along with the stronger economy.
The shares have been rallying since bottoming around $11 in late
August and now appear to have broken resistance at $15, where they
peaked in January. Today's option trader is positioning for them to
run back toward the $18 level where TSO traded in May 2009.
If that happens, he or she will earn about 300 percent. The
strategy, known as a bullish call spread, uses the premium from
selling higher strike calls to reduce the price of owning the lower
The trade offers the benefit of increasing leverage, but also
limits gains if the stock continues past $18. See our Education
Section for more.
Overall option volume in TSO is 11 times greater than average so
far today, with calls accounting for 90 percent of the activity,
according to Heat Seeker.
(Chart courtesy of tradeMONSTER)