Reliance Petroleum (RPL) has shown a serious spike in futures volumes today (RPL, RPL Futures) with volumes up 15x from 3,000 to 45,000. Open Interest is also up to 46 million shares, from a mere 6 million, all in trading today (Monday). [Noticed in Moneyoga’s F&O Analytics Screen]

RPL is an interesting story and supposedly the internal target for completing the refinery was March 2008. The rapid increase in price (it shot up to Rs. 165 from the days low of Rs. 144 in a few hours) and F&O activity seem to suggest there is some news on the cards. The crude prices at $106 should also dramatically improve margins if production is on - and this is one of the biggest heavy crude refineries in the world.

Must keep a close watch. Let’s see what happens after a week. At this point, the way to go is to Buy - with a 10% trailing stop loss.

Disclosure: Long a 200 call option. In the face of such a move I simply could not resist a deep OTM call at Rs. 1.