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Big trade sees floor in Marathon Oil

Chris McKhann (chris.mckhann@optionmonster.com)

A huge trade is betting that losses will be limited in Marathon Oil in coming weeks.

optionMONSTER systems detected the purchase of 33,800 August 34 puts for $0.02 against previous open interest of 35,000. At the same time, 33,800 September 33 puts were sold for the bid price of $0.58 in volume above open interest of 2,940 at that strike.

The trader is rolling a short-put position forward, closing the essentially worthless August contracts to take risk off the table and opening the new position in September. This is a bet that MRO will hold above $33 in the next month, with the potential obligation to buy shares if they fall below that level. (See our Education section)

MRO fell 1.13 percent on Friday to finish at $34.26. It hit a high of $37.87 on Aug. 5 before gapping down on the energy company's earnings results two days later. Shares were last below $33 at the start of May.

More than 78,000 MRO options traded on Friday, compared to a daily average of 4,000 in the last month.

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