Occidental Petroleum has pulled back to key support, and one big investor is getting long.
optionMONSTER's Heat Seeker monitoring program detected the purchase of 10,000 January 110 calls for $1.48 and the sale of an equal number of January 120 calls for $0.28. Volume was more than triple open interest at both strikes, which indicates a new bullish call spread was implemented.
The investor will now buy the oil driller for $110 and sell it for $120 if it reaches those levels by expiration early next year. They paid $1.20 to control the $10 spread, translating into profit of 733 percent from the shares climbing about 20 percent. (See our Education section for more on the leveraging power of options.)
OXY rose 0.31 percent to $100.30 in afternoon trading. It reached a two-year high of $105.64 in June, but then rolled over and slid to the same $97 level where it peaked several times between mid-October and mid-May. That could make some chart watchers think it remains in a bullish uptrend despite the broader energy sector struggling of late.
Overall option volume is 13 times greater than average in the company so far today, with calls accounting for a bullish 91 percent of the total.
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