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Bull keeps running with Marathon Oil

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Marathon Oil has gone a blistering run with the rest of the energy sector, and one trader apparently believes that there's more fuel in the tank.

optionMONSTER's Heat Seeker system shows that a trader sold a block of 4,000 April 31 calls for $4.30 and bought the same number of April 35 calls for $1.32. The volume was below the previous open interest in the 31s and above it in the 35s.

This indicates that the trader is closing an initial long-call position and using some of the proceeds to buy a new position at a strike that is $4 higher. The new calls, which lock in the price where the stock can be purchased, are looking for MRO to gain roughly 4.5 percent or more before the contracts expire a month from today. (See our Education section)

MRO is down 1.11 percent at $34.78 this morning but yesterday closed at $35.34, just pennies off its 52-week high from February 2012. The oil and gas company has been climbing steadily since trading below $24 in June.

Total option volume in the name has reached 9,500 contracts this morning, already double its full-session average in the last month. Only 599 puts have changed hands so far.

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