Bulls double money in $MPC

Option traders have been racking up profits in Marathon Petroleum (MPC) for weeks, and today is no exception.

On Oct. 8, our tracking systems detected the purchase of 5,000 November $65 calls for $1.26 to $1.30 above open interest of 1,813 contracts with shares at $60.16. Market Rebellion co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls have traded for as much as $3.15 so far today, about 2.5 times their purchase prices. The stock rose 8.51% in the same time frame, showing how quickly options can far outperform their underlying shares.

It is the fifth winning trade in the name posted on Market Rebellion since Sept. 23.

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.

MPC is up 1.68% to $65.18 this afternoon. Shares are up sharply since Sept. 25, when activist fund Elliott Management renewed its demand for the oil refining and transportation firm to split into three companies.