Options Intelligence Report: United States Oil Fund LP (USO) & Marathon Oil Corp. (MRO)

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USO ñ United States Oil Fund LP
Shares of the U.S. Oil Fund Limited Partnership surrendered 0.60% of their value during the first half of the trading session to stand at $40.69. Despite the slight dip in share price today, one options investor initiated a medium-term bullish stance on the fund.  The optimistic individual purchased 2,000 calls at the July $43 strike for an average premium of $1.36 apiece, and sold the same number of calls at the higher July $48 strike for $0.41 each. The debit call spread in this case cost the investor a net premium of $0.95 per contract. Maximum available profits of $4.05 accumulate for the bullish player if shares of the underlying fund surge 18% from the current price to exceed $48.00 by expiration day in July. The trader starts to make money as long as the USOís share price edges above the breakeven point on the spread at $43.95 ahead of expiration.

 


MRO ñ Marathon Oil Corp.
The oil and gas exploration and development company enticed bullish options players to the July contract today despite the 0.60% decline in the value of its shares to $32.01. One optimistic investor purchased a debit call spread in order to position for a sharp increase in the price of the underlying stock by expiration in the next several months time. The trader picked up 2,500 calls at the July $33 strike for an average premium of $1.32 apiece, and sold the same number of calls at the higher July $37 strike for $0.22 each. Net premium paid for the spread amounts to $1.10 per contract. Thus, the bullish player is prepared to accrue maximum potential profits of $2.90 per contract if Marathonís share price surges 15.6% over the current value of the stock to exceed $37.00 by expiration day in July.

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