Bulls double money in $OKE

Energy names have been big winners for option traders in recent weeks, and ONEOK (OKE) is no exception.

On Oct. 22, Market Rebellion’s Unusual Activity Service identified the purchase of 6,450 December $72.50 calls for $1.10 to $1.15 with shares at $70.64. This was clearly fresh buying in those calls, which expire this afternoon, as open interest in the strike was a mere 3 contracts before that session began.

Those calls have traded for as much as $2.35 so far today, more than twice its purchase prices. The stock rose 5.9% in the same time frame, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

OKE is up 1.19% to $74.86 in midday trading. The natural-gas company has rebounded along with the rest of the energy sector this month.