Marathon Petroleum Crashes 2.85%: What’s Fueling This Sudden Drop?

Summary
• Marathon Petroleum (MPC) plunges 2.85% to $172.47, its lowest since mid-July.
• Institutional ownership at 77% raises questions about large-scale profit-taking.
• TD Cowen and Goldman Sachs maintain Buy ratings, but Piper Sandler issues a cautious Hold.
• Volatility spikes as options turnover surges 3,450 shares for the 162.5 call.

Marathon Petroleum’s sharp intraday decline has ignited a frenzy among traders, with the stock trading 2.85% below its previous close. Amid a mixed analyst landscape and institutional-heavy ownership, the move hints at a potential shift in sentiment. With the 52-week range still intact at $115.10–$183.31, the stock’s next direction hinges on key technical levels and sector dynamics.

Institutional Ownership Shifts Trigger Sharp Sell-Off in MPC
Marathon Petroleum’s 2.85% drop is largely attributed to its 77% institutional ownership, which leaves the stock highly sensitive to large-scale trading actions. Recent insider sales, including Kim Rucker’s 28% reduction in holdings, signal potential profit-taking. Meanwhile, conflicting analyst ratings—ranging from a $190 price target (TD Cowen) to a $175 Hold—create uncertainty. Technically, the stock is testing the 30-day moving average at $171.61, with RSI at 56.37 and MACD diverging below the signal line (-0.65). These indicators suggest a bearish consolidation phase, exacerbated by the 52-week high at $183.31 acting as a psychological barrier.

Energy Sector Woes: Valero Energy Mirrors MPC’s Decline
Marathon Petroleum’s drop aligns with broader refining sector weakness, as Valero Energy (VLO), the sector leader, fell 4.198% on the same day. Both companies face pressure from volatile crude prices and refining margins. While MPC’s 52-week high of $183.31 remains intact, VLO’s decline highlights sector-wide concerns. However, MPC’s institutional ownership structure makes it more susceptible to rapid swings compared to VLO’s diversified institutional base.

Options Playbook: Leveraged Calls and Protective Puts for MPC Volatility
• MACD: 3.008 (below signal line 3.657); RSI: 56.37 (neutral); Bollinger Bands: $164.71–$183.76; 200D MA: $152.14 (far below).
• 30D MA: $171.61 (support); 200D MA: $152.14 (long-term trend).

Technical indicators suggest MPC is in a short-term bearish phase but remains above critical support. Traders should watch the 30-day moving average at $171.61 and the 200-day average at $152.14 for directional cues.

Top Option 1: MPC20250801C162.5
• Strike: $162.5; Expiration: 2025-08-01; Type: Call
• IV: 43.22% (moderate); Leverage Ratio: 15.03% (high); Delta: 0.828 (deep in-the-money); Theta: -0.481 (high decay); Gamma: 0.0217 (moderate).
• Payoff (5% downside): $163.85 (breakeven). This contract offers high leverage for a bullish rebound, with theta decay favoring a quick move above $162.5.

Top Option 2: MPC20250801P167.5
• Strike: $167.5; Expiration: 2025-08-01; Type: Put
• IV: 34.06% (moderate); Leverage Ratio: 111.48% (extreme); Delta: -0.267 (at-the-money); Theta: -0.041 (low decay); Gamma: 0.0356 (high).
• Payoff (5% downside): $171.09 (profit zone). This put offers asymmetric upside with high gamma, ideal for a sharp rebound in volatility.

Aggressive bulls may consider MPC20250801C162.5 into a bounce above $175, while risk-averse traders should hedge with MPC20250801P167.5 to protect against a breakdown.

Backtest Marathon Petroleum Stock Performance
The backtest of Morgan Stanley Capital International (MPC) after an intraday percentage change of less than -3% shows favorable performance metrics across various time frames. The 3-Day win rate is 58.95%, the 10-Day win rate is 59.12%, and the 30-Day win rate is 62.81%, indicating a higher probability of positive returns in the short to medium term following the intraday plunge. The maximum return during the backtest period was 10.15%, which occurred on day 59, suggesting that MPC can generate substantial gains in the period immediately following a significant downturn.

Bullish Analysts Remain: MPC’s Path to $190 Hinges on $175 Rebound
Marathon Petroleum’s 2.85% drop is a short-term correction rather than a structural breakdown. Analysts like TD Cowen and Goldman Sachs remain bullish, targeting $190–$205, but Piper Sandler’s caution signals mixed sentiment. The stock’s next move depends on reclaiming the $175 level, a critical psychological and technical threshold. Meanwhile, Valero Energy’s -4.198% decline underscores sector-wide risks. Traders should watch for a breakout above $176.57 (intraday high) or a breakdown below $171.61 (30-day MA). For now, the 162.5 call and 167.5 put offer the best asymmetric risk-reward profile.