Options Brief: Frontier Oil (FTO)

FTO – Frontier Oil Corporation – Shares of the independent energy company engaged in crude oil refining and wholesale marketing of refined petroleum products are up nearly 3.25% to $14.38 this afternoon. The rally in the price of the underlying stock inspired bullish options traders to purchase out-of-the-money call options in the August contract. Investors expecting to see continued appreciation in the price of Frontier’s shares in the next couple of months looked to the August $15 strike to pick up roughly 1,700 calls at an average premium of $0.66 apiece. Call buyers at this strike price make money if FTO’s shares surge 8.90% over the current price of $14.38 to trade above the average breakeven point to the upside at $15.66 by August expiration. Frontier Oil Corp.’s shares last traded above $15.66 on May 13, 2010, when the stock touched an intraday high of $15.70.