NEW YORK -- Traders are turning bullish on HollyFrontier
(HFC) as oil refiners continue their recent comeback.
More than 5,700 November 48 calls were purchased on Friday, with large blocks snapped up initially for 35 cents and then for 45 cents, according toOptionMonster's tracking systems. This is clearly fresh buying, as open interest in the strike was a mere 185 contracts before the trades appeared.
These calls lock in the price where a stock can be purchased for the next month no matter how far it might rise. They could be sold earlier at a profit if premiums rise with a rally before then, but the contracts will expire worthless if shares remain below $48 through mid-November.
HollyFrontier shares rose 1.63% to $44.92 on Friday, one session after breaking above its 50- and 100-day moving averages. Total option volume in the name was triple its daily average for the last month, with overall calls outpacing puts by a bullish 12-to-ratio.
The company is scheduled to release third-quarter results on Nov. 6 before the opening bell. Other refiners that have seen upside action this month include Valero Energy, Tesoro, and Phillips 66.
Yamamoto has no positions in HFC.