Murphy Oil (MUR) adds $4.54 to $63.54 after announcing plans to spinoff its refining business. The company also said it was paying a special dividend and initiating a $1 billion share buyback. The stock is up and recent options trades on the stock include a Jan 62.5 – 65 (1X2) call ratio spread for $1.70, 20000X. It possibly rolls a block of 20,000 Jan 62.5 calls opened earlier this month when 20,000 were bought for $1.89 following a CNBC report that Third Point might take an activist role in MUR (see 10/4 color). The stock has rallied 9.2 percent since that time and the position is being closed at $3.90 — a $4 million win. A new position is being opened in 40,000 Jan 65 calls for $2.80 and, at the same time, a 20000-lot of Jan 70 calls was sold at $1.10 per contract, resulting in a new position in the Jan 65 – 70 (2X1) call ratio spread. If so, the new position seems to express continued confidence in MUR.
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.