Marathon Petroleum options activity points to hedging by long-term holders

Marathon Petroleum Corp (MPC) shares are currently trading at $422.03, having risen by 1.96% as of Sept 17, 2:43 PM EDT. However, the options market is actively hedging this rally, with puts dominating at a 3.8:1 ratio (9,950 puts versus 2,613 calls). The volume of put options is the highest since December 20, 2024, indicating a notable trend.

The Jan 15, 2027 $350 put option, with 5,902 contracts, is almost entirely a new position. This illustrates long-term holders purchasing insurance against a possible ~17% drop over the next four months. With MPC up 160% year-to-date and the consensus price target around $330, which is roughly 22% below the current price, a stakeholder locking in a $350 floor by year-end is a rational move.

The risk/reward of carrying an unhedged position at such elevated levels, after a significant run, is asymmetric. The Oct 16, 2026 $380/$340 put spread (620 lots each leg) is set to expire in just over four weeks. This strategy offers cost-efficient, tactical, and time-specific protection around the next potential catalyst. The pre-existing open interest on both legs suggests that this is being added to an existing structure.

Not all investors are defensive; the Apr 16, 2027 $450 call option (591 contracts, with virtually zero prior open interest) is a clean directional bet with seven months of runway. UBS recently set their price target at exactly $450, citing structurally elevated refining margins and strong Q3 expectations. This call buyer aligns with the bullish case.

The market's implied volatility stands at 52.37%, pricing in significant price swings. Notably, the 90/110 skew is at just 0.24 percentage points, indicating that the options market is not pricing in outsized tail risk to the downside relative to upside. This suggests that the put activity reflects disciplined portfolio management rather than panic or a bearish directional bet.

The flow indicates a stock that has surpassed analyst models, with Q2 EPS of $17.73 exceeding the $14.27 estimate and revenue rising 53.5% year-over-year. Simultaneously, a $450 call purchase confirms that bulls are still in the game, buying protection alongside their conviction. This report is AI-generated, reviewed by an editor.