$COP bulls double their money

Option traders posted substantial profits in ConocoPhillips today.

On June 27, Investitute’s tracking systems detected the purchase of 5,100 July $70.50 calls for $1.12 to $1.29 with shares at $69.29. These were clearly new positions, as open interest in the strike was only 555 contracts before the trades occurred. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls sold for $2.04 this morning, almost twice their initial purchase price. The stock rose 3.88% in the same time frame, illustrating the kind of leverage that can be achieved with options. Najarian updated his positions today on air this afternoon.

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.

COP was up 1.04% to $71.74 today. The oil and natural-gas producer has rallied along with the rest of the energy sector as the price of crude as risen.