How to Trade Marathon Oil as Stock Hits Monthly High

By Andrew Keene  OCT 17, 2012 1:05 PM

Marathon stock is only about $6 from its all-time high in 2008, which was the best year for the company. BP, Chevron, ConocoPhillips, and Exxon Mobil are also gaining today.


MINYANVILLE ORIGINAL Marathon Oil (NYSE:MRO) is a top global energy company. It participates in oil exploration and production, oil sands mining, and integrated gas. Marathon is currently trading around $31.15. The stock has been trading in a 52-week range of $23.17-$35.49; it has seen a gain of 6.47% YTD and 30.73% in the past 12 months.
Major oil companies are gaining today including BP (NYSE:BP), Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP), Exxon Mobil Corp (NYSE:XOM), and Marathon Oil.
Marathon hit a monthly high today, after it declined from its high in September until the beginning of this week. The stock is only about $6.00 from its all-time high in 2008, which was the best year for Marathon, bringing in revenues of $71 billion. Since the financial crisis, revenues have averaged around $11 billion growing $3 billion per year.
The company is currently looking to sell developed land in Texas after it increases production capabilities. Currently, daily gross output is around 100,000 barrels of oil, almost 70,000 more since last November. The sale will generate between $1.5 and $3 billion.
Marathon has also been making progress in Africa, announcing entry into Ethiopia (at the beginning of October), Kenya, and Gabon. It is also exploring land in the Kurdistan region of Iraq.
My Trade:

Trade: Sell the Nov 30-29 Put Spread for $0.25.
Risk: $0.75
Reward: $0.25
Breakeven: $29.75
Notes: Large put selling volume in Marathon came across the tape this morning; this is bullish activity.

No positions in stocks mentioned.