Bulls post quick profits in $LYB

It took only a few days option traders to double their money on upside positions in LyndellBasell Industries.

On May 31, Investitute’s proprietary programs identified the purchase of 10,000 January $90 calls for $1.55 as part of a bullish spread with shares at $74.15. Open interest in the strike was only 2,390 contracts before the trade ocurred, showing that this was a new position.

Those calls sold for as much as $2.95 today, about twice their purchase price. The stock rose 8.95% in the same time frame, illustrating the kind of leverage that can be achieved quickly 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.

LYB reached a session high of $82.26 early this morning before pulling back to $80.66 an hour before the close, down 1.67% on the day. Yesterday the U.K.-based chemical company announced that it had ended negotiations over the possible acquisition of Brazil’s Braskem.