Thursday, 18 October 2012

Trade ideas: October 18, 2012

Bullish Idea:

Murphy Oil Corp. (MUR)

Murphy Oil (MUR) adds $4.54 to $63.54 after announcing plans to spinoff its refining business. The company also said it was paying a special dividend and initiating a $1 billion share buyback. The stock is up and recent options trades on the stock include a Jan 62.5 – 65 (1X2) call ratio spread for $1.70, 20000X. It possibly rolls a block of 20,000 Jan 62.5 calls opened earlier this month when 20,000 were bought for $1.89 following a CNBC report that Third Point might take an activist role in MUR (see 10/4 color). The stock has rallied 9.2 percent since that time and the position is being closed at $3.90 — a $4 million win. A new position is being opened in 40,000 Jan 65 calls for $2.80 and, at the same time, a 20000-lot of Jan 70 calls was sold at $1.10 per contract, resulting in a new position in the Jan 65 – 70 (2X1) call ratio spread. If so, the new position seems to express continued confidence in MUR.

Bearish Trading Ideas:

Overseas Shipholding Group: (OSG):

Overseas Shipholding (OSG), which saw a flurry of put activty Friday when the stock was still north of $5 (see 10/12 color), has come under fire today. The stock is down $1.46 to $3.71 on heavy volume of 2 million shares and at session lows on concerns the shipping company has maxed out its lending facilities. Another 20,000 puts and 7,350 calls traded on the stock. Jan 4 puts were the most actives Friday. Now, Jan and Oct 3 puts are seeing the bulk of the flow and 30-day ATM vols are soaring 83 percent to 220.

Trade Ideas (H/T: Fred Ruffy )
Please do your due diligence. Options and derivatives involve high risk as in any trading. You are responsible for any trade you take. Please read the full disclosure above.


  1. Great info - where do you get the flows info?

  2. I get these from various subscriptions (paid & unpaid)and giving it free to my readers. I am not sure where retail can get these info. but you will have it here definitely.