Options News
Bulls turn quick gains in $BHGE
It took less than three sessions for option traders to post significant profits in Baker Hughes. On Wednesday, Investitute’s market scanners detected the purchase of 2,200 March $26 calls for $1.10 to $1.59 with shares at $27. Open interest in the strike was only 361 contracts before the trades occurred, showing that these were new […]
It took less than three sessions for option traders to post significant profits in Baker Hughes.
On Wednesday, Investitute’s market scanners detected the purchase of 2,200 March $26 calls for $1.10 to $1.59 with shares at $27. Open interest in the strike was only 361 contracts before the trades occurred, showing that these were new positions.
Those calls traded for $2.60 today, about 2.5 times their original purchase price. The stock price rose 5.5% in the same time frame, underscoring how quickly options can far outpace gains in their underlying shares.
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.
BHGE rose to $28.48 right early this morning but pulled back to close at $28.03, off 0.04% on the session. The oilfield-services company bounced off 52-week lows this week as the price of crude rebounded.