$FCX call prices quadruple

Bullish option traders are logging exponential gains in Freeport-McMoRan (FCX) today.

On Oct. 1, Market Rebellion’s tracking systems detected the purchase of 5,000 December $11 for $0.22 and $0.23 with shares at $9.35. This was clearly a new position, as open interest in the strike was 1,760 contracts before the trade occurred.

Those calls changed hands for as much as $0.98 today, more than 4 times their purchase price. The stock rose 23.64% in the same time period, underscoring how options can far outperform their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

FCX is up 8.18% to $11.51 this afternoon. The mining and energy company has rallied this week with hopes of progress on a U.S.-China trade deal.