$ALB call prices jump overnight

Option traders more than doubled their money today on bullish positions opened in Albemarle only one session earlier.

Just yesterday, Investitute’s tracking systems detected the purchase of 2,500 November $105 calls for $1.58 as part of a bullish spread with shares at $99.59. Volume was well above the strike’s open interest of 1,393 contracts, showing that this was a new position. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for $4.30 minutes before today’s closing bell, more than 2.5 times their purchase price. The stock rose 6.19% at the same time, underscoring how quickly options can far outpace gains in 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.

ALB climbed 6.25% today to close at $105.42. The chemical company, whose products include lithium compounds used in batteries, is scheduled to report earnings after the market closes on Nov. 7.