Bulls post 5-fold gains in $PUMP

Option traders cashed in exponential profits on upside positions in ProPetro before they expired this afternoon.

On Dec. 17, Investitute’s tracking systems detected the purchase of 2,775 March $17.50 calls for $0.65 as part of a bullish roll with shares at $14.89. Open interest in the strike was a mere 96 contracts before that session began, showing that this was a new position.

Those calls traded for $3.37 today, more than 5 times their purchase price. The stock rallied 40.36% in the same time period, a huge move but nowhere near that of its options on a relative basis.

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.

PUMP was up 1.16% to $20.94 today. The oilfield-services company, which is up 70% this year, was initiated with a “buy” rating and $28 price target at Goldman Sachs at the beginning of this week.