Marathon Petroleum Plunges 3.36%: Is Institutional Profit-Taking Fueling the Fire?

Summary
• Marathon Petroleum (MPC) crashes 3.36% to $171.57, its lowest since mid-July.
• Institutional ownership at 77% raises questions about large-scale profit-taking.
• Valero Energy (VLO) mirrors MPC’s decline, falling 4.75% amid sector-wide weakness.

Marathon Petroleum’s intraday freefall has sent shockwaves through the refining sector, with the stock trading over 3% below its previous close. Amid conflicting analyst ratings and a surge in options turnover, the move underscores heightened volatility. The stock’s 52-week range remains intact, but key technical levels—such as the 30-day moving average at $171.61—now loom as critical battlegrounds for bulls and bears.

Institutional Ownership Shifts Trigger Sharp Sell-Off in MPC
Marathon Petroleum’s 3.36% drop is primarily driven by its 77% institutional ownership, making the stock highly sensitive to large-scale trading actions. Recent insider sales, including Kim Rucker’s 28% reduction in holdings, signal aggressive profit-taking. Meanwhile, divergent analyst ratings—from TD Cowen’s $190 price target to Piper Sandler’s cautious Hold—have created 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), suggesting a bearish consolidation phase.

Energy Sector Woes: Valero Energy Mirrors MPC’s Decline
Marathon Petroleum’s selloff aligns with broader refining sector weakness, as Valero Energy (VLO) fell 4.75% on the same day. Both stocks 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 risks. However, MPC’s concentrated 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 monitor 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: 55.36% (high); Leverage Ratio: 14.92% (high); Delta: 0.750 (deep in-the-money); Theta: -0.541 (high decay); Gamma: 0.021 (moderate); Turnover: 3,450
• 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: 30.13% (moderate); Leverage Ratio: 112.15% (extreme); Delta: -0.292 (at-the-money); Theta: -0.017 (low decay); Gamma: 0.042 (high); Turnover: 3,471
• 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 a -3% intraday plunge shows favorable performance metrics. 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 term following the 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 weeks following a significant downturn.

MPC at Critical Crossroads: Rebound or Reassessment?
Marathon Petroleum’s 3.36% drop is a short-term correction rather than a structural breakdown, but the stock’s next move hinges on reclaiming the $175 level—a critical psychological and technical threshold. With Valero Energy (VLO) down 4.75%, sector-wide risks remain elevated. 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. Watch for $175 retest or sector reversal cues.