What's behind large call trade in BP

optionMONSTER

BP is seeing large call volume with shares right in the middle of their six-month range.

optionMONSTER's systems show that 5,000 January 46 calls were sold for the bid price of $0.10 against open interest of almost 17,000 contracts. At the same time the tradre bought 5,000 July 46 calls for the ask price of $1.14 in volume that was above the open interest of 2,003 at that strike, so that is a new opening position.

This could be a new calendar spread , with the trader risking $1.04 for a maximum profit that would come with BP right around the $46 strike price at that first expiration. But given that the sale of the nearer-term options nets such a small amount, it seems far more likely that this is a roll, with the trader exiting long calls in January and moving the position to July for more time. (See our Education section)

BP is up 0.5 percent to $42.23 this morning, on pace for its highest close in six weeks. The energy giant's shares carved out a range from March to the end of May as the stock fell from a 52-week high above $48 to a low of $36.25.

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