Options Intelligence Report: United States Oil Fund LP (USO) & Marathon Oil Corp. (MRO)
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.
Note: The material presented in this commentary is provided forinformational purposes only and is based upon information that isconsidered to be reliable. However, neither Interactive Brokers LLC norits affiliates warrant its completeness, accuracy or adequacy and itshould not be relied upon as such. Neither IB nor its affiliates areresponsible for any errors or omissions or for results obtained fromthe use of this information. Past performance is not necessarilyindicative of future results.
This material is not intended as an offer or solicitation for thepurchase or sale of any security or other financial instrument.Securities or other financial instruments mentioned in this materialare not suitable for all investors. Any opinions expressed herein aregiven in good faith, are subject to change without notice, and are onlycorrect as of the stated date of their issue. The information containedherein does not constitute advice on the tax consequences of making anyparticular investment decision. This material does not take intoaccount your particular investment objectives, financial situations orneeds and is not intended as a recommendation to you of any particularsecurities, financial instruments or strategies. Before investing, youshould consider whether it is suitable for your particularcircumstances and, as necessary, seek professional advice.
View Andrew Wilkinson's post archive >