Trading Desk - November 5th 2026

Okay, Patrick. Where's the trade?

Thanks, Eric. Michael's argument is that the markets may be too quick to translate political pressure to end these wars into lasting improvement in energy supply. Continued attacks on refineries could keep refining capacity contained even if crude prices retreat.

That creates a potential opportunity in Marathon Petroleum symbol MPC where refining profitability depends on the spread between crude costs and the selling price of gasoline, diesel, and other fuels. What attracts me here is the magnitude of the recent correction. Over just 16 days, the stock has declined approximately $116 or 23% peak to trough, returning back to its September lows.

The opportunity is to express the view that this sell-off represents an overshoot. Recovering even half that decline would create a substantial tactical rebound without requiring a return to the highs. With MPC trading around $392.68, I'm looking at the December 18th, 2026 390 to 450 bull call spread with approximately 43 days till its expiration.

Now, by buying the 390 call around $30 and selling the $450 call for about $10, it produces a $20 net debit per share for a $60 wide spread. That commits $20 a share for a maximum profit potential of $40 a share or a 2:1 profit to risk ratio. Expiration break-even is at $410, approximately 4.4% above the reference price.

Now, of course, selling that upper strike reduces the premium committed by 1/3 while capping participation near our recovery objective. This is a tactical mean reversion trade supported by the refining margin thesis with a defined window for a rebound to develop. So, to put this into context, we're pairing a potentially excessive correction with a business that could continue to benefit from constrained refining capacity committing a defined amount of capital to participate in a partial recovery.