Suncor Energy Attracts Option Bulls Amid Buffett Boost

SU options are trading at three times the average intraday pace today

by Andrea Kramer

Published on Feb 15, 2019 at 12:52 PM
Updated on Jun 24, 2020 at 10:16 AM

The shares of Suncor Energy Inc. (NYSE:SU) are higher today, after activist investor Warren Buffett's Berkshire Hathaway (BRK.A) disclosed a stake in the Canadian oil firm. Against this backdrop, SU options are flying off the shelves at a much faster-than-usual pace.

Suncor stock was last seen 3.8% higher at $33.78. The security has rebounded more than 30% since its Dec. 26 low of $25.81, and is set to close atop its 100-day moving average for the first time since August. Further, SU is now staring up at the $35 region, which is where the shares landed after a bear gap in October. It's also around a 50% Fibonacci retracement of SU's drop from its July high of $42.55 to the aforementioned low.

SU stock chart feb 15

So far today, Suncor has seen roughly 2,500 calls and 1,600 puts change hands -- three times the average intraday pace. The soon-to-expire February 33 call is most popular, with some speculators likely liquidating their now in-the-money positions. Meanwhile, it looks like some traders may be selling to open the March 30 put, betting on SU shares to remain above the round-number strike through March options expiration.

Bullish betting has been par for the course for Suncor Energy, even before today's Buffett boost. In the past two weeks on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has racked up a 10-day call/put volume ratio of 3.13 -- in the 70th percentile of its annual range. This indicates a slightly bigger-than-usual appetite for long calls over puts of late.

Analysts are also fond of SU. The security boasts 14 "buy" or better endorsements, compared to two tepid "holds" and not one "sell."

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