Options Check-Up: Hess Corporation, Murphy Oil, Occidental Petroleum

Analyzing recent option activity on Hess Corp. (HES), Murphy Oil Corporation (MUR), and Occidental Petroleum Corporation (OXY)

Feb 4, 2015 at 8:25 AM
facebook twitter linkedin


Among the stocks attracting attention from options traders lately are crude oil concerns Hess Corp. (NYSE:HES), Murphy Oil Corporation (NYSE:MUR), and Occidental Petroleum Corporation (NYSE:OXY). Below, we'll break down how options traders are positioning themselves, and how much speculators are willing to pay for their bets on HES, MUR, and OXY.

  • HES added 3.7% yesterday to reach $72.68, after crude oil prices shot up to a year-to-date high and BP plc (ADR) (NYSE:BP) announced capex cuts, prompting multiple stocks in the sector to climb higher. Meanwhile, sentiment in Hess Corp.'s options pits is has rarely been this pessimistic, with the equity's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 3.06 sitting in the bearishly skewed 97th percentile of its annual range. What's more, traders are paying historically fair prices for their short-term bets on HES, with its Schaeffer's Volatility Index (SVI) of 35% sitting in the 59th percentile of all similar readings taken over the past year.

  • Sector peer MUR also benefited from crude oil's rise, with the stock advancing about 4.7% to land at $49.91. Year-over-year, however, the security has shed about 10.4% of its value. Accordingly, sentiment in the options pits is bearish, as Murphy Oil Corporation's 10-day ISE/CBOE/PHLX put/call volume ratio of 8.31 sits just 12 percentage points away from an annual high. Near-term options for MUR are available for bottom-of-the-barrel prices, per its SVI of 35%, which is lower than 85% of all similar readings taken over the past 52 weeks.

  • OXY gained about 2.5% yesterday to hit $82.15, benefiting from sector tailwinds. Additionally, the stock is one of the few oil sector equities to advance in 2015, adding about 1.9% year-to-date. Sentiment in the options pits is still bearish, though, as Occidental Petroleum Corporation's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.60 sits in the 69th percentile of its annual range. Speculators are paying middling prices for their bets on OXY, with its SVI of 28% sitting in the 49th percentile of all similar annual readings.

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earnings guide for Q3 before it's too late!


  
 
Special Offers from Schaeffer's Trading Partners