Thursday, July 14, 2011

Trade of the Day: Sunoco (SUN) August $44/$48 call spread

The Trade
A trader bought the August $44/$48 bull call spread, 6,000x at $0.50, or $300,000.

The trader is making a large bullish bet that Sunoco will rally into August. It's important to note that SUN held its 50 day EMA for 3 straight days. SUN closed trading today at $40.98. Barclay's has a $55 target on shares. SUN will report quarterly earnings on August 4th. The break even underlying price for the spread is $44.50. The 52-week range for is a low of $32.06 and a high of $46.98.

The white line shown in the daily chart is the break even price. Sunoco traded 17,286 option contracts today compared to average daily volume of 5,490. Sunoco is trading at 17.25x earnings, 0.12x sales and 1.7x book.

*Special thanks to Option Radar, BMO Capital, MEB Options, LiveVolPro, CBOE, Option Monster, T.O.P. group, and all of the options desks and traders we work with to provide the option flow!

No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

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