Calls turn quick gains in $ET

It took just two sessions for bullish option traders to more than double their money in Energy Transfer.

On Feb. 19, Investitute’s proprietary programs found that 4,000 Weekly $15.50 calls expiring tomorrow afternoon were purchased for $0.19 with shares at $15.42. This was clearly fresh buying, as volume was far above the strike’s open interest before the activity appeared.

Those calls traded for as much as $0.50 today, more than 2.5 times their purchase prices. The stock rose 3.57% 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 $15.98 early this morning before pulling back to close at $15.54, up 0.26% on the session. The natural-gas pipeline operator reported mixed quarterly results after the market closed yesterday.