Bulls transfer big gains in $ET

Bullish option traders are transferring large gains today in Energy Transfer (ET).

On Apr. 15, Market Rebellion’s Unusual Activity Service found that 17,200 May $7 calls were bought for $0.15 to $0.20 with shares at $5.88. This was clearly fresh buying, as open interest in the strike was only 15,373 contracts before that session began.

Those calls have traded for as much as $1.95 today, about 10 times their purchase prices. The stock rose 52.21% in the same time frame, illustrating hte 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.

ET climbed to $9.02 earlier but has since pulled back, last at $8.57, up 5.41% on the session. The natural-gas pipeline operator will report earnings on May 11 after the closing bell and yesterday afternoon Blackstone (BX) dislosed in a 13G filing a passive 6.95% stake in the company.