Bulls drill for profits in $OAS

Bullish option traders have made exponential gains on their money in Oasis Petroleum (OAS).

On Dec. 2, our Unusual Activity Service detected the purchase of 3,400 December $2.50 calls for $0.10 to $0.15 with shares at $2.33. This was clearly fresh buying, as open interest in the strike was only 613 contracts before that session began.

Those calls have traded up to $0.60 so far this session, about 5 times their average purchase price. The stock rose 31.76% 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.

OAS is currently up 3.75% to $3.04. The oil and gas company has rallied this month as the price of crude spiked higher.