Valero Energy Corporation Draws Heavy December Put Volume

Put volume is unusually heavy on Valero Energy Corporation (VLO) today, with traders setting their sights on the stock's December 18 strike. A block of 5,000 puts crossed the tape near the ask price earlier today, sending implied volatility on this strike up by 1.5%. So far, the December 18 put has traded volume of 8,267 contracts on open interest of 7,833, which suggests that new positions are being added here today.

Today's preference for puts is a deviation from the recent trend for VLO, which has racked up a 10-day International Securities Exchange (ISE) call/put volume ratio of 2.43. This reading ranks in the 76th annual percentile, indicating that calls have been purchased over puts at a faster pace than usual during the past couple of weeks.

Today's spike in put volume could be linked to some downbeat refinery news from VLO. The company reported that its 160,000 barrel-per-day refinery in Paulsboro, New Jersey, will be shut down for three weeks for maintenance. The stock is down more than 2% at last check as a result, trading near its lowest point of the day.

However, it's also worth noting that VLO goes ex-dividend today, which means that some of the session's option volume could be linked to arbitrage or dividend capture strategies.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx