Bulls triple money in $OXY

Option traders rode the spike in crude oil to exponential profits in Occidental Petroleum (OXY) today.

On Sept. 6, our tracking systems detected the purchase of 17,500 October $47.50 calls for $0.58 to $0.64 above open interest of 2,033 contracts as part of a bullish roll with shares at $44.97. Market Rebellion co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $2.06 this morning, more than 3 times their purchase prices. The stock rose 6.43% in the same time frame, showing how quickly options can far outperform their underlying shares.

It is the second winning trade in the name posted on Market Rebellion in the last three sessions.

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.

$OXY reached a session high of $47.91 in early trading before pulling back to $45.40 this afternoon, down 5.01% on the day. Shares of the oil and gas producer surged yesterday after the weekend drone attack on a major Saudi oil facility.