ConocoPhillips (COP): Is Takeover Chatter Baiting Option Bulls?

ConocoPhillips (COP) calls remain popular amid Exxon Mobil Corporation (XOM) rumors

Mar 23, 2015 at 2:08 PM
facebook twitter linkedin


ConocoPhillips (NYSE:COP) jumped as high as $64.18 earlier, on what some media outlets attribute to unconfirmed M&A chatter with Exxon Mobil Corporation (NYSE:XOM), as well as a possible asset sale for COP. While the stock has since slipped back into the red -- down 0.3% at $63.60 -- some option players are gambling on a rally by Friday's close.

COP call volume spiked around the same time the shares did, and is currently running at a slightly accelerated clip, compared to the stock's average afternoon volume. Most active by a mile is the weekly 3/27 64-strike call, which has seen apparent buy-to-open activity. By purchasing the calls at a volume-weighted average price (VWAP) of $0.65, the buyers will make money if COP topples $64.65 (strike plus VWAP) by the end of the week, when the options expire.

Even before today's rumor mill got to work, COP speculators were scooping up calls at a rapid-fire rate. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 14.39 stands higher than 98% of all other readings from the past year.

Echoing that, COP's Schaeffer's put/call open interest ratio (SOIR) has plummeted to 0.71 -- in just the 8th percentile of its annual range. In simpler terms, short-term traders have rarely been more call-biased on COP.

Technically speaking, ConocoPhillips (NYSE:COP) has largely gone the way of crude oil in recent months. Since notching a record peak of $87.09 in late July, the shares have surrendered nearly 27%, falling to a fresh annual low of $60.57 just over a week ago.

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners