Call buyers hit gusher in $MPC

Option traders have tripled their money on bullish positions in Marathon Petroleum (MPC).

On May 31, Investitute’s market scanners identified the purchase of 25,000 October $52.50 calls for $1.80 as part of a bullish roll with shares at $45.92. This was clearly a new position, as open interest in the strike was only 3,233 contracts before that session began.

Those calls traded for as much as $5.19 today, about 3 times their purchase price. The stock rose 21.52% in the same time period, a large move but nowhere near that of its options on a relative basis.

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.

MPC is up 0.11% to $55.50 in late-day trading. The refining company has rallied in the last month as the price of crude came off recent lows.