By David Russell, reporter at OptionMonsterNEW YORK -- Traders turned bullish on Tesoro ( TSO) late Thursday, continuing a string of positive option activity in the refiners. A flurry of call buying hit the name with less than 15 minutes remaining in the session. Traders first snapped up 8,000 February 50 calls for $1.88, followed by almost 35,000 February 60s for 40 cents. Volume was more than 20 times the previous open interest at each strike, indicating that new positions were initiated. "Unreal and far upside," OptionMonster co-founder Pete Najarian declared in our subscribers' chat room after spotting the trade. It was one of the several energy-related stocks he has cited in recent sessions. Others, including Newfield Exploration and Whiting Petroleum, racked up big profits in recent sessions. Long calls lock in the price where shares can be bought, so they can move a lot more than the stock on a percentage basis and produce significant leverage. It's interesting to see the activity after large put sales occurred in other refiners, such as Phillips 66 and Marathon Petroleum. On Sept. 30, the PSX May 57.50s were sold for $5.85 and MPC's April 62.50s were sold for about $5.95. Those investors were anticipating little downside in both names and were willing to backstop other traders for losses below the strike prices. TSO rose 1.08% to $43.79 Thursday. It tripled between June 2012 and last May but has been skidding lower since. The stock has followed the fortunes of other refiners in recent months as price convergence between West Texas Intermediate and Brent crude oils hurt margins. The recent options action suggests that investors think they're ready to start rallying again. Almost 44,600 contracts traded in TSO Thursday, 11 times its daily average for the last month. Overall calls in the name accounted for a bullish 87% of the total. Russell has no positions in TSO
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