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)

by Griffin Kruse

Published on Feb 4, 2015 at 8:25 AM
Updated on Apr 20, 2015 at 5:32 PM

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.

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