Exxon Mobil Corporation (XOM) Gains Prompt Big Upside Bet

One trader bought to open a massive sweep of Exxon Mobil Corporation (XOM) calls

by Digital Content Group

Published on Apr 14, 2015 at 2:11 PM
Updated on Jun 24, 2020 at 10:16 AM

Exxon Mobil Corporation (NYSE:XOM) is among a number of energy stocks following oil higher this afternoon. At last check, the blue chip is 2.2% higher at $87.18, making it the biggest gainer on the Dow. Meanwhile, calls are changing hands at nearly triple the usual intraday clip.

Seeing the most action by far is XOM's April 88 call, where north of 11,000 contracts have crossed. Data from Trade-Alert indicates a sweep of 8,841 contracts was bought to open at a premium of $0.26, resulting in a total cash outlay of nearly $230,000 (premium paid * number of contracts * 100 shares per contract). In short, this buyer anticipates XOM will topple $88 by Friday's close, when front-month options expire -- or risk losing the entirety of his initial net debit.

This optimism is reflective of recent activity on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). XOM's 10-day call/put volume ratio across this trio of exchanges is 2.06, in the 95th annual percentile.

However, despite Exxon Mobil Corporation's (NYSE:XOM) intraday rally, the stock has been a longer-term dud. Year-to-date, the shares have given back almost 6%, and as recently as March 13 hit a two-year low of $82.68.

Daily Chart of XOM since January 2015


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