Marathon Petroleum Plunges 2.22%—What’s Fueling This Sudden Downturn?

Summary
• Marathon Petroleum (MPC) trades at $171.54, down 2.22% intraday with a 52-week low of $115.10 and high of $183.10
• Q2 2025 earnings report due August 5, with analysts forecasting $3.38 EPS and $31.70B revenue
• Institutional stake increases, including Woodline Partners’ 38.3% position boost in Q1
• Sector leader Valero Energy (VLO) declines 3.04%, amplifying market anxiety

Marathon Petroleum’s sharp intraday drop has captured investor attention, trading at $171.54 with a 2.22% loss. The stock’s 52-week range of $115.10 to $183.10 highlights its volatility, while upcoming earnings on August 5 add to the uncertainty. Institutional buying and a 2.08% dividend yield contrast with sector weakness and declining refining margins.

Earnings Dismay and Insider Exit Fuel Sharp Decline
Marathon Petroleum’s selloff stems from a confluence of bearish signals: Q2 earnings are expected to drop 21.8% year-over-year to $3.22 per share, with revenue declining 19.4% to $30.91 billion. Analysts have revised estimates upward by 22.9% over 30 days, yet the Zacks Earnings ESP of -2.74% suggests a likely miss. Compounding this, insider Kim Rucker sold 28.07% of her holdings for $1.29 million, signaling internal caution. The stock’s -178 P/E ratio and 1.75% net margin further underscore its unprofitability, triggering profit-taking and margin calls.

Refining Sector Weakness Amplifies MPC’s Slide
The Oil & Gas Refining & Marketing sector is under pressure, with Valero Energy (VLO) down 3.04% as of 14:54 ET. Sector-wide concerns include falling crude margins and Trump’s 25% tariff threat on Venezuelan oil, which could disrupt supply chains. Marathon’s -2.22% move aligns with broader refining sector underperformance, though its dividend yield of 2.08% offers some appeal amid rising discounting by Indian refineries and U.S. inventory declines.

Options Playbook: Targeting 175 Call and 180 Call Amid Volatile Setup
• MACD: 1.90 (Signal: 2.71, Histogram: -0.80) – bearish crossover
• RSI: 43.24 – oversold territory
• Bollinger Bands: 169.34–181.76 – price near lower band
• 200D MA: 152.21 (below current price)
Key Levels: Support at 167.33, resistance at 180.00. Short-term volatility is elevated, with the 200D MA acting as a critical floor. A break below $169.34 could trigger panic selling, while a rebound above $180 may test the 52W high of $183.10.
Top Options:
• MPC20250808C175 (Call, $175 strike, 2025-08-08 exp):
- IV: 34.14% (moderate)
- Delta: 0.3843 (moderate sensitivity)
- Theta: -0.3232 (high time decay)
- Gamma: 0.0393 (high sensitivity to price swings)
- Turnover: 5,314 (high liquidity)
- Leverage Ratio: 67.88% (aggressive)
- Payoff (5% down): $12.87 (max(0, 163.00 - 175) = $0)
- Why: High gamma and liquidity make it ideal for a volatility-driven rebound. If MPC closes above $175, this call could capitalize on the earnings bounce.
• MPC20250808C180 (Call, $180 strike, 2025-08-08 exp):
- IV: 34.61% (moderate)
- Delta: 0.2174 (low sensitivity)
- Theta: -0.2237 (moderate decay)
- Gamma: 0.0299 (moderate sensitivity)
- Turnover: 4,855 (high liquidity)
- Leverage Ratio: 144.32% (very aggressive)
- Payoff (5% down): $5.00 (max(0, 163.00 - 180) = $0)
- Why: High leverage and IV position it for a breakout if MPC’s earnings beat estimates and retests the 52W high. Aggressive bulls should watch for a close above $180.
Hook: Aggressive bulls may consider MPC20250808C175 into a bounce above $175. If $180 breaks, MPC20250808C180 offers high-risk, high-reward potential.

Backtest Marathon Petroleum Stock Performance
The backtest of the performance of the SPY ETF after an intraday plunge of at least -2% shows favorable short-to-medium-term gains. The 3-day win rate is 59.05%, the 10-day win rate is 59.05%, and the 30-day win rate is 62.92%. Additionally, the maximum return during the backtest period was 10.28%, which occurred on day 59, indicating that the ETF has a tendency to rebound strongly after experiencing a significant downturn.

Act Now: Secure 175 Call Before Earnings Fallout
Marathon Petroleum’s decline is unsustainable without a catalyst—namely, a Q2 earnings beat or a surge in crude prices. Key signals to monitor include the 175 call’s gamma-driven response to a rebound and the sector leader Valero Energy’s -3.04% move. Investors should prioritize the 175 call for a short-term rebound or the 180 call for a high-risk breakout. Watch for $169.34 support breakdown or a Trump tariff reversal to dictate next steps.