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SUN (Sunoco - Oil and Gas, Refining and Marketing)

 
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clarkrl2



Joined: 09 Feb 2011
Posts: 48
Location: Kansas

PostPosted: Thu Apr 21, 2011 9:27 pm    Post subject: SUN (Sunoco - Oil and Gas, Refining and Marketing) Reply with quote

The crack spread has been over 20 for eleven straight weeks. This should result in higher profit margins for refiners. The close of SUN today Apr. 21 was 42.17. I bought a bullish call spread this week with strikes of 42 buy and 44 sell with an Aug 2011 expiry.

I track the crack spread using the 3 barrels of crude oil to 2 barrels of gasoline and 1 barrel of heating oil. [42*(2 * gasoline + heating oil) - 3 * crude]/3. Today at the time of this posting the spread was $24.35/barrel.

Earnings release is scheduled for May 5. Earnings and profit margin will likely benefit due to the higher crack spread.
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clarkrl2



Joined: 09 Feb 2011
Posts: 48
Location: Kansas

PostPosted: Wed Aug 24, 2011 7:34 pm    Post subject: Reply with quote

This trade turned out to be a disaster as last Friday it expired out of the money for a 100% loss. At least you can't do any worse than that.
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