MRO recently increased its estimate of drillable wells in the Eagle Ford Shale to 3,000 and plans to build new rigs in the area in addition to restructuring the 16 existing rigs there. MRO is investing $2 billion in that region (1/3 of its total target capital spending for 2013) and expects with the new changes to have the production capability to crank out 85,000 barrels of oil equivalent per day which is roughly 20,000 more than the production reports in 2012. Additionally, to increase its share buy-backs and help out the balance sheet, MRO is continuing its $1.5 billion – $3 billion divestment plan concerning one of its own subsidiaries and SSI Thirty-One Ltd. Analysts expect MRO to buy back at least 5.39 million shares this year and continue the trend until 2015 based on the company’s free cash flow estimates.

Though MRO is by far the smallest compared to its competitors Chevron Corp. and Exxon Mobil in terms of market cap, it does have the highest gross margin (ttm) of 0.68, the largest P/E at 16.83, and the biggest P/S at 1.64. Of its $15.81 billion in total revenue, $1.55 billion represent net income, and the company maintains a modest EPS of 2.18. MRO’s 52-week change at 47.25% is nearly twice that of the S&P 500, and it is currently trading above the 50 and 200 MVA at $36.78 today, a YTD increase of almost 20%.

MRO’s second quarter earnings report is scheduled for Tuesday, August 6^th after the close.

Unusual Option Activity:

We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial.  We offer this service through our 7 hour daily LIVE trading room http://bit.ly/135QWt8 or through Premium Twitter feed with all entries, exits, and unusual options activity tweeted all day long: http://bit.ly/11f0L9u .

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.

The “Institutional Trade”:  On 7.12.2013 a Trader sold 32,400 MRO Aug 34 Puts for $.35 when stock was trading $36.63

Risk: $3465 per 1 lot
Reward: $35 per 1 lot
Breakeven: $34.65
Cash Outlay: $1,134,000
A trader will have to buy 3.24 Million Shares of Stock under $35 between now and August expiration

I will be looking for a long position in MRO, but nothing triggers just yet. 

We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/135QWt8 or through Premium Twitter feed with all entries, exits, and unusual options activity tweeted all day long: http://bit.ly/11f0L9u .

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.

We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/135QWt8 or through Premium Twitter feed with all entries, exits, and unusual options activity tweeted all day long: http://bit.ly/11f0L9u .

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.

In recent news MNKD announced that they have completed the phase III study of their diabetes insulin Afrezza. The stock has seen an increase in its valuation within the last year by 330%, which is in part due to its results from Afrezza. The product is in the late phases of clinical investigation and would be used to treat adults with type 1 or type 2 diabetes. Although the drug has strong potential, the FDA has already rejected it twice and MannKind continues to look for ways to improve the insulin device. The positives for Afrezza are that if the drug is able to pass it has the potential to work better than any other insulin device on the market, which could create a strong demand for the product.

In other news, Deerfield Management Company has made an agreement with MNKD under which the company may receive up to $160 million in order to help finance the insulin product. The money that MannKind may receive is meant to support the regulatory process as well as commercialization of the product.

Possible Trade Set-Ups:  The MNKD Aug 7 Put, Aug 8 Call is priced at $2

Measured Move Targets: 

Upside: $8 + $2= $10

Downside: $7 – $2 = $5

Possible Bullish Set-Up: Buying the Aug 8-10-12 Bull Call Spread for $.25 debit
Risk: $25 per 1 lot
Reward: $175 per 1 lot
Breakeven: $8.25 and $11.75

Possible Bearish Set-Up: Buying the Aug 7-5-3 Bear Put Spread for $.45 debit
Risk: $45 per 1 lot
Reward: $155 per 1 lot
Breakeven: $3.45 and $6.55

(Full Disclaimer: I have no position on yet)

We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/135QWt8 or through Premium Twitter feed with all entries, exits, and unusual options activity tweeted all day long: http://bit.ly/11f0L9u .

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.

We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/135QWt8 or through Premium Twitter feed with all entries, exits, and unusual options activity tweeted all day long: http://bit.ly/11f0L9u .

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.