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By Ainvest in unusual-options-activity —

STNG Options Analysis - Tanker Rally Bet

💰 $1.4M in unusual options activity detected. Premium-only analysis reveals the strategy, catalysts, and trading opportunities.

🚢 STNG $1.4M Call Buy - Smart Money Bets on Tanker Rally! 💰

📅 November 28, 2025 | 🔥 Unusual Activity Detected

🎯 The Quick Take

Someone just dropped $1.4 MILLION on Scorpio Tankers calls this morning at 09:51:34! This trade bought 3,000 contracts of $55 strike calls expiring December 19th - that's a bullish bet with STNG trading at $57.91, already in-the-money by nearly $3. With the tanker market showing recovery signs and STNG up 14.6% YTD after aggressive fleet modernization moves, this looks like smart money positioning for a year-end rally.

📊 Company Overview

Scorpio Tankers Inc. (STNG) is a provider of marine transportation of petroleum products with an eco-friendly fleet of tankers:
- Market Cap: $3.0 Billion
- Industry: Marine Transportation / Oil & Gas Shipping
- Current Price: $57.91 (up 14.6% YTD)
- Primary Business: Operates 99 owned and leased tankers (38 LR2, 47 MR, 14 Handymax) transporting refined petroleum products globally

💰 The Option Flow Breakdown

The Tape (November 28, 2025 @ 09:51:34):

Time Symbol Side Buy/Sell Type Expiration Premium Strike Volume OI Size Spot Option Price Option Symbol
09:51:34 STNG MID BUY CALL 2025-12-19 $1.4M $55 3.0K 2.6K 3,000 $57.91 $4.50 STNG20251219C55

🤓 What This Actually Means

This is a bullish positioning trade on in-the-money calls! Here's what went down:

  • 💸 Solid premium deployed: $1.4M ($4.50 per contract × 3,000 contracts)
  • 🎯 In-the-money position: $55 strike with STNG trading at $57.91 = $2.91 intrinsic value
  • ⏰ Time value component: $1.59 remaining with 21 days to December expiration
  • 📊 Meaningful size: 3,000 contracts represents 300,000 shares worth ~$17.4M
  • 🏦 Institutional play: Volume of 3,000 on 2,600 open interest = fresh positioning

What's really happening here:
Someone is buying STNG20251219C55 calls that are already $2.91 in-the-money, paying $4.50 per contract. This isn't a lottery ticket - it's a leveraged stock position with built-in intrinsic value. The trader gets $2.91 of value per share immediately, plus the delta exposure to any move higher. With 21 days to expiration, they're betting on continued momentum through year-end.

Strategy Classification: This reads as a closing call position with MEDIUM confidence. The z-score of 3.68 marks this as EXTREMELY UNUSUAL activity - happening just a few times per year for STNG. Volume exceeds open interest, suggesting this could be closing an existing short position or opening a fresh bullish bet.

Unusual Score: 🔥 EXTREME - This trade is 3.68 standard deviations above normal activity for STNG. For context, that means we typically see this kind of size only a handful of times annually - not your typical retail flow.

📈 Technical Setup / Chart Check-Up

YTD Performance Chart

STNG ytd chart

Scorpio Tankers (STNG) is up +14.6% YTD with current price at $57.33. The chart tells a recovery story - after hitting lows around $30 in March/April, STNG has climbed steadily back, peaking at $64 in September and November before the recent pullback.

Key observations:
- 📈 Steady uptrend: Consistent higher lows since spring low of $30.63
- 💹 Recent consolidation: Trading between $55-$62 range over past two months
- 🎢 Volume patterns: Increased activity in November suggests positioning ahead of catalysts
- 📊 Support holding: Multiple successful tests of $55-56 area providing confidence for bulls

Gamma-Based Support & Resistance Analysis

STNG gamma sr

Current Price: $57.33

The gamma exposure map reveals critical price magnets around current levels:

🔵 Support Levels (Put Gamma Below Price):
- $55 - Strongest nearby support with 0.97 total gamma exposure (4% below current)
- $52.50 - Secondary support at 0.09 gamma (8.4% below)
- $50 - Major floor with 0.35 gamma (12.8% below)
- $47.50 - Deep support at 0.46 gamma (17.1% below)

🟠 Resistance Levels (Call Gamma Above Price):
- $57.50 - Immediate resistance with 0.32 gamma (just 0.3% above!)
- $60 - Major resistance with 1.55 gamma exposure (4.7% above)
- $62.50 - Secondary ceiling at 0.27 gamma (9.0% above)
- $65 - Strong resistance zone with 0.44 gamma (13.4% above)
- $67.50 - Extended resistance at 0.12 gamma (17.7% above)

What this means for traders:
The gamma data shows STNG is trading right at the $57.50 resistance level with the next major resistance wall at $60. That $55 strike on today's call purchase aligns perfectly with the strongest support level - the buyer has built-in protection if the stock pulls back. The heavy concentration of call gamma at $60 suggests that's the key upside target. Market makers will hedge by selling stock as price approaches $60, creating natural resistance.

Net GEX Bias: Bearish (2.95B call gamma vs 2.98B put gamma) - Positioning is fairly balanced with a slight bearish tilt, suggesting dealers are neutral to slightly short gamma. However, the $60 resistance represents the strongest gamma wall that needs to be breached for a sustained rally.

Implied Move Analysis

STNG implied move

Options market pricing for upcoming expirations:

  • 📅 Monthly OPEX (Dec 19 - 21 days): ±$3.78 (±6.6%) → Range: $53.55 - $61.11
  • 📅 Quarterly Triple Witch (Dec 19 - 21 days): ±$3.78 (±6.6%) → Range: $53.55 - $61.11
  • 📅 Yearly LEAPS (Dec 18, 2026 - 385 days): ±$27.19 (±47.4%) → Range: $30.14 - $84.52

Translation:
Options traders are pricing in a 6.6% move ($3.78) through December expiration - that's meaningful volatility for a tanker stock. The upper end of the expected range at $61.11 aligns perfectly with where resistance should cap the move based on gamma analysis. This suggests the market sees decent odds of a breakout attempt to $60-61 over the next three weeks.

The December 19th expiration (when this trade expires) has an upper range of $61.11 - meaning the market thinks there's a reasonable probability STNG could test that level. That would put these $55 calls firmly in-the-money with $6+ of intrinsic value vs. the $4.50 paid.

🎪 Catalysts

🔥 Past Catalysts (Already Happened)

Q2 2025 Results - July 30, 2025 (Strong Beat!) 📊

STNG crushed Q2 expectations with earnings that beat consensus by 26%:
- 💰 EPS: $1.41 vs. $1.12 consensus (26% beat) - source
- 📊 Revenue: $230.23M vs. $217.73M expected (5.7% beat) - source
- 📈 Net Income: $73.5M ($1.59 basic EPS, $1.53 diluted) - source
- 💵 Adjusted EBITDA: $144.5M; Adjusted Net Income: $67.8M - source

MR Fleet Modernization - November 6, 2025 (Just Announced!) 🚢

Major fleet renewal program announced less than a month ago:
- 💼 Selling: Four 2014-built MR tankers for $32M each ($128M total) - source
- 🏗️ Buying: Four scrubber-fitted MR newbuildings for $45M each ($180M total) from Chinese shipyard - source
- 📅 Delivery schedule: Q2 2026, Q3 2026, Q1 2027, Q2 2027 - source
- 🔧 Net investment: $52M ($180M purchase - $128M sale)
- ⚡ Strategic impact: Reduces average fleet age while maintaining scrubber capacity

VLCC Market Entry - November 11, 2025 (Game Changer!) 🛳️

STNG is entering the crude oil tanker market for the first time:
- 🏗️ Order: Two Very Large Crude Carriers (VLCCs) from Hanwha Ocean, South Korea - source
- 💰 Price: $128M per vessel ($256M total investment) - source
- 📅 Deliveries: Q3 2028 and Q4 2028 - source
- 🎯 Strategic significance: First entry into $100B+ crude oil tanker market, diversifying from pure product tanker focus

🚀 Upcoming Catalysts (Next 6 Months)

Q3 2025 Earnings - Expected Late October 2025 📅

Next earnings report should be coming soon:
- 📊 Expected timing: Late October 2025 based on historical pattern - source
- 🎯 Key metrics to watch: MR tanker spot rates, fleet utilization, impact of Red Sea disruptions on voyage distances, progress on vessel sales and newbuilding deliveries
- 💵 Buyback update: Progress on $225M remaining authorization - source
- 🚢 VLCC construction timeline: Updates on construction progress

Quarterly Dividend Payment - December 2025 💰

STNG maintains consistent quarterly dividend:
- 💵 Amount: $0.40 per share - source
- 📈 Yield: 2.9% at current prices - source
- 📅 Pattern: Historically pays quarterly (March, June, September, December)
- 💪 Sustainability: Strong balance sheet with $1.3B liquidity supports dividend - source

Share Buyback Execution - Ongoing 📊

Active capital allocation program:
- 💵 Remaining authorization: $225M as of September 2024 - source
- 📊 Recent pace: Purchased 390,972 shares at avg. $52.82 in 2025 - source
- 🎯 Potential impact: At current prices (~$58), could repurchase ~3.9M additional shares (7.9% of outstanding)
- 💰 2024 shareholder returns: Returned $419M via buybacks and dividends - source

Older Vessel Sales - Q1 2026 🚢

Fleet modernization continues:
- 📅 Expected closing: Q1 2026 for four 2014-built MR tankers - source
- 💰 Cash proceeds: $128M
- 🔧 Fleet impact: Removal of 11-year-old tonnage, average fleet age improvement

First MR Newbuilding Delivery - Q2 2026 🏗️

Modern scrubber-fitted vessel joining fleet:
- 📅 Timing: Q2 2026 - source
- ⚡ Advantage: Scrubber-fitted vessels provide $100M+ annual fuel savings across fleet - source
- 🎯 Competitive edge: STNG operates largest scrubber-fitted tanker fleet in industry - source

🎲 Price Targets & Probabilities

Using gamma levels, implied move data, and upcoming catalysts, here are the scenarios:

📈 Bull Case (40% probability)

Target: $62-$65

How we get there:
- 💪 Q3 earnings beat expectations continuing Q2's strong momentum (26% beat sets high bar)
- 🚀 Tanker rates show stabilization or improvement - Atlantic MR rates up 34% YTD to $37,300/day despite recent softness
- 🌍 Red Sea disruptions continue adding 10-14 days to voyages, supporting tonne-mile demand
- 💵 Aggressive buyback execution with $225M remaining authorization at attractive current prices
- 📊 Breakthrough gamma resistance at $60 on sustained buying, targeting $62.50-$65 zone
- 🏗️ Market positively revalues stock on successful fleet modernization strategy

Key support factors:
- Scrubber fleet provides $100M+ annual fuel cost advantage vs. competitors
- Strong balance sheet ($1.3B liquidity, $740M debt reduction in 2024) enables opportunistic capital allocation
- Trading at 9.77x P/E vs. industry average 13.3x - 28% valuation discount

🎯 Base Case (45% probability)

Target: $55-$60 range

Most likely scenario:
- ✅ Q3 earnings meet expectations with solid but not spectacular results
- 📱 Tanker market remains mixed - Atlantic strength offset by Pacific weakness (down 42% YTD)
- ⚖️ Fleet expansion headwinds (5.6% supply growth vs. 2.7% demand in 2025) offset by Red Sea tonne-mile support
- 🔄 Trading within strong gamma support ($55) and resistance ($60) bands
- 📊 Market digests recent strategic announcements (MR modernization, VLCC entry), waits for execution
- 💰 Continued buybacks and dividend provide shareholder return floor

This is where the trade makes sense: Stock stays range-bound between $55-60, the buyer keeps all intrinsic value plus potential upside. The $55 strike provides downside protection at the strongest support level.

📉 Bear Case (15% probability)

Target: $50-$52.50

What could go wrong:
- 😰 Q3 earnings disappoint similar to Q4 2024's 62.5% miss
- 🌊 Tanker rate environment deteriorates further - MSI projects continued H1 2025 rate pressure
- 🚢 Industry fleet expansion accelerates (~85 MR tankers scheduled 2025) pressuring rates
- 🌍 Red Sea situation normalizes, eliminating voyage extension benefits (15-25% rate compression)
- 🇨🇳 Chinese refinery demand disappoints - critical for tanker demand
- 📉 Broader energy sector selloff drags shipping stocks lower
- 🛡️ Key support: Strong put gamma at $50-$52.50 should limit downside unless fundamentals deteriorate significantly

Important note: Even in bear case, the bought calls have $2.91 intrinsic value providing cushion. Breakeven is $59.50 ($55 strike + $4.50 paid), so buyer profits as long as STNG stays above that level at December expiration.

💡 Trading Ideas

🛡️ Conservative: Follow the Smart Money with Stock

Play: Buy STNG stock around current levels with tight stop

Why this works:
- ⏰ Smart money just deployed $1.4M on bullish bet - piggybacking on professional research
- 📊 Strong support at $55 (both gamma support and call strike) limits downside risk
- 💸 2.9% dividend yield provides income while waiting - source
- 🎯 $225M buyback authorization supports stock at these levels - source
- 📈 Recent fleet modernization announcements position for 2026+ growth

Action plan:
- 🎯 Enter: STNG at $57-58 range on any pullback
- 🛡️ Stop loss: $54.50 (below major $55 gamma support)
- 📈 Target: $62-65 (gamma resistance zone, 7-12% upside)
- ⏰ Timeframe: 1-3 months

Estimated P&L:
- 💰 Entry: $57.50 (100 shares = $5,750 investment)
- 📈 Target: $62 = $450 profit (7.8% gain) + dividends
- 📉 Stop loss: $54.50 = -$300 loss (-5.2%)
- 🎯 Risk/Reward: 1.5:1

Risk level: Low (defined stop, liquid stock) | Skill level: Beginner-friendly

⚖️ Balanced: Bull Call Spread December Expiration

Play: Buy $57.50 calls, Sell $62.50 calls (Dec 19 expiration)

Structure: Buy STNG20251219C57.50, Sell STNG20251219C62.50

Why this works:
- 🎢 Defined risk spread ($5 wide = $500 max risk per spread)
- 🎯 Targets move from current $57.33 to gamma resistance at $60-62.50
- ⏰ 21 days to expiration matches implied move timeframe ($53.55-$61.11 range)
- 📈 Captures upside from tanker sector momentum without unlimited risk
- 💰 Lower capital requirement than stock (net debit around $2-2.50)

Estimated P&L:
- 💰 Net debit: ~$2.50 per spread ($250 risk per contract)
- 📈 Max profit: $2.50 if STNG at/above $62.50 ($250 profit = 100% return)
- 📉 Max loss: $2.50 if STNG below $57.50 ($250 loss)
- 🎯 Breakeven: $60.00 ($57.50 strike + $2.50 debit)

Entry timing: Wait for any dip toward $56-57 for better entry pricing

Risk level: Moderate (defined risk) | Skill level: Intermediate

🚀 Aggressive: Replicate the Whale Trade (HIGH CONVICTION ONLY!)

Play: Buy January 2026 $55 calls

Structure: Buy STNG20260116C55 (January expiration)

Why this could work:
- 💸 Similar structure to the $1.4M institutional buy but with more time
- 🎯 $55 strike aligns with strongest gamma support - built-in protection
- ⚡ 49 days to expiration vs. 21 days for December = less time decay pressure
- 📊 Captures Q3 earnings, potential Q4 2025 preview, and year-end positioning
- 🔄 More time for tanker market thesis to play out
- 💪 Delta exposure similar to stock but with capped downside

Why this could blow up (SERIOUS RISKS):
- 💥 Time decay: Options lose value every day even if stock stays flat
- 😱 Tanker rates could deteriorate further - MSI projects H1 2025 weakness
- 📉 Q4 2024's 62.5% earnings miss shows company can disappoint badly
- 🌊 Fleet expansion pressures (5.6% supply vs. 2.7% demand) could crush rates
- 📊 Options can expire worthless if stock drops below strike
- 💰 Higher capital requirement than spreads (~$5-6 per contract = $500-600)

Estimated P&L:
- 💰 Entry: ~$5.50 per contract ($550 cost)
- 📈 Target at $65: $10 value = $450 profit (82% return)
- 📉 Max loss: $550 if STNG below $55 at expiration (100% loss)
- 🎯 Breakeven: $60.50 ($55 strike + $5.50 paid)

Risk level: HIGH (can lose 100%) | Skill level: Advanced only

⚠️ WARNING: DO NOT attempt this trade unless you:
- Understand options can expire worthless - max loss is 100% of premium paid
- Can afford to lose entire investment ($550 per contract minimum)
- Have experience with long options and understand time decay (theta)
- Believe strongly in bullish tanker thesis over 1-2 month timeframe
- Can actively monitor position and exit if thesis changes

⚠️ Risk Factors

Don't get caught by these potential landmines:

🎯 The Bottom Line

Real talk: Someone just dropped $1.4M on STNG calls this morning while the stock is trading near $58 with solid support at $55. This isn't a gamble - it's a calculated bet with built-in downside protection (already $2.91 in-the-money) and clear upside targets ($60-62 resistance levels).

What this trade tells us:
- 🎯 Sophisticated player expects STNG to hold $55 floor and rally toward $60+ through December
- 💰 Buying in-the-money calls shows conviction - willing to pay $4.50 for $2.91 intrinsic value plus upside leverage
- ⚖️ Timing aligns with recent strategic announcements (fleet modernization, VLCC entry) and potential Q3 earnings
- 📊 Similar to owning stock but with capped downside and leveraged upside

If you own STNG:
- ✅ Hold position through December - recent catalysts and buyback support provide floor
- 📊 Strong gamma support at $55 and company buybacks at $52.82 recent average create safety net
- ⏰ Q3 earnings (expected late October) is key catalyst to watch
- 🎯 If stock breaks above $60 on solid earnings and rate stabilization, $62-65 becomes realistic
- 🛡️ Consider trimming 25% if stock hits $63+ to lock in gains

If you're watching STNG from sidelines:
- ⏰ Wait for Q3 earnings clarity before committing - late October expected
- 🎯 Pullback to $55-56 (gamma support) would be attractive entry point aligning with whale's $55 strike
- 📈 Looking for confirmation of tanker rate stabilization and Q3 earnings beating conservative expectations
- 🚀 Longer-term (6-12 months), MR newbuilding deliveries (Q2 2026+) and continued buyback execution are legitimate catalysts
- ⚠️ Current valuation requires tanker market stabilization to work - high sensitivity to rate environment

If you're bearish on STNG:
- 🎯 Wait for failed breakout at $60 before initiating short positions - fighting smart money is dangerous
- 📊 First meaningful support at $55 (gamma wall and call strike), major support at $52.50
- ⚠️ Watch for tanker rate deterioration or Red Sea normalization as catalyst for downside
- 📉 Put spreads ($55/$50 or $52.50/$47.50) offer defined risk way to play downside
- ⏰ Timing is critical: Stock has momentum from recent announcements; wait for concrete negative catalyst

Mark your calendar - Key dates:
- 📅 Late October 2025 - Q3 2025 earnings expected
- 📅 December 13, 2025 - Quarterly dividend payment date (historical pattern)
- 📅 December 19, 2025 - Monthly OPEX, this $1.4M call trade expires
- 📅 Q1 2026 - Four older MR tanker sales expected to close ($128M proceeds)
- 📅 Q2 2026 - First MR newbuilding delivery (scrubber-fitted, modern vessel)
- 📅 Q3 2028 / Q4 2028 - Two VLCC deliveries (first crude oil tankers)

Final verdict: This is a textbook "smart money positioning" signal. Someone with deep pockets and professional research just bet $1.4M that STNG rallies from $58 toward $60+ over the next 21 days. The trade structure (buying ITM calls) shows this isn't speculation - it's a leveraged stock position with built-in protection at $55. The timing aligns perfectly with upcoming Q3 earnings catalyst and recent strategic announcements. While tanker market headwinds exist (fleet expansion, rate pressure), the strong balance sheet ($1.3B liquidity, $225M buyback authorization) and compelling valuation (9.77x P/E, 28% discount to peers) create an asymmetric setup. Risk/reward favors the bulls in the near-term, especially with clear support at $55 and resistance targets at $60-62.

Disclaimer: Options trading involves substantial risk of loss and is not suitable for all investors. This analysis is for educational purposes only and not financial advice. Past performance doesn't guarantee future results. The z-score of 3.68 reflects this trade's size relative to recent STNG history - it does not imply the trade will be profitable or that you should follow it. Always do your own research and consider consulting a licensed financial advisor before trading. Tanker stocks are highly cyclical and sensitive to commodity markets, geopolitical events, and global economic conditions.

About Scorpio Tankers Inc.: Scorpio Tankers is a provider of marine transportation of petroleum products with a $3.0 billion market cap, operating 99 owned and leased tankers in the marine transportation and oil & gas shipping industry.

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