ConocoPhillips (COP) Bulls Set Their Sights on $50

ConocoPhillips (NYSE:COP) call buyers have been busy today, amid the energy stock's sharp gains

by Alex Eppstein

Published on Oct 2, 2015 at 3:13 PM
Updated on Jun 24, 2020 at 10:16 AM

ConocoPhillips (NYSE:COP) is surging this afternoon, up 4.7% at $50.43 -- and on track for its first finish above the half-century mark since Sept. 17 -- thanks to a broad rally among energy stocks and rising crude prices. The bullish price action has sent call volume sharply higher, with the contracts crossing at close to triple the normal afternoon rate.

Digging deeper, option traders are rolling the dice on COP extending its lead over the round-number $50 level in the near future. Data from the International Securities Exchange (ISE) confirms buy-to-open activity at the weekly 10/9 50-strike call, as well as the November 50 call. The volume-weighted average price for the weekly strike is $0.48, and $2.19 for the back-month call, making breakeven at the respective expiration dates $50.48 and $52.19 (strike plus VWAP).

This represents a departure from recent sessions, in which put buyers have been busy. Specifically, COP's 10-day ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.26 ranks in the 77th percentile of its annual range.

On the charts, ConocoPhillips (NYSE:COP) has struggled, today notwithstanding. The shares have surrendered 27% year-to-date, and have underperformed the broader S&P 500 Index (SPX) by 12.5 percentage points over the last three months.

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