Options News
Call buyers drill for large gains in $PE
Option traders have nearly tripled their money on bullish positions in Parsley Energy. On Dec. 28, Investitute’s market scanners identified the purchase of 10,000 February $17.50 calls in one print for $0.85 with shares at $15.99. Open interest in the strike was a mere 21 contracts before the trade occurred, showing that it was a […]
Option traders have nearly tripled their money on bullish positions in Parsley Energy.
On Dec. 28, Investitute’s market scanners identified the purchase of 10,000 February $17.50 calls in one print for $0.85 with shares at $15.99. Open interest in the strike was a mere 21 contracts before the trade occurred, showing that it was a new position.
Those calls traded for $2.35 today, almost 3 times their purchase price. The stock rose 20.45% in the same time period, underscoring how options can far outperform 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.
PE was up 2.51% to $19.21 today. The oil and natural-gas producer has rallied off a 52-week low of $14.17 reached the day after Christmas as the price of crude has risen.