Shares of Marathon Petroleum tumbled a day after the company reported first-quarter earnings, but traders apparently believe that further downside will be limited.
optionMONSTER systems detected heavy selling in the June 70 puts, with big blocks going for the bid price of $1.60 yesterday. The volume at that strike was 15,508, clearly new positions because open interest in the strike was a mere 19 contracts before the session began.
The put selling represents a bet that MPC will hold above $70 by expiration in mid-June. The traders will face the obligation to buy shares if they fall below that strike price. (See our Education section)
MPC dropped 6.24 percent to end yesterday's session at $73.47, its lowest close since January. The oil-refining company had traded as high as $92.73 in late March.
More than 29,000 MPC options changed hands on the day, compared to a daily average of 3,400 in the last month.
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