Option traders have been extremely active in Phillips 66 for months, and the bulls were back yesterday.
OptionMonster's monitoring programs detected heavy buying in the March 65 calls, with some 5,500 contracts trading against open interest of just 612 contracts. The first blocks priced for $0.90, but premiums then climbed to $1 as the activity heated up.
Those calls have locked in a $65 entry price on the red-hot oil refiner for the next 1-1/2 months, no matter how high the stock goes. The trader stands to generate some nice leverage in the event of a continued rally, but the contracts can also become worthless if it doesn't move.