Amidst a very strong oil market today (WTI at $63/barrel, up $1.80), there has been a tremendous amount of option activity across the energy spectrum. That includes significant call option buying in the mid stream pipeline names like Plains Group Holdings ( PAGP Feb 21 calls) and Targa Resources (TRGP Feb 42 calls), plus huge call option “roll ups” (selling profitable lower strike prices options to buy longer dated, higher strike price call options, thereby retaining exposure to the name) in the oil service sector, especially in the large cap stocks, Schlumberger (SLB) and Halliburton (HAL).

One less volatile name caught my eye as being potentially quite attractive if one is looking to add exposure to the sector. British Petroleum (BP) has seen over 55,000 call options bought today (more than 10X normal daily volume) with special focus on the March 40 calls with total volume of 12,000 contracts, including a block of 10,000 bought mid day at $.65 with the stock around $38.85. Implied volatility for this option is quite modest at 15.5%, which makes sense as historically, BP is not a hugely volatile name. However you give yourself over two months of time to see if BP can finally break out above its 200 day moving average, which not coincidentally sits right below the $40 level at $39.80.