$CRC bulls rack up profits in a day

Option traders doubled their money in California Resources Corporation today, only one session after opening upside positions in the energy name.

Just yesterday, Investitute’s market scanners identified the purchase of 5,000 October $43 calls for $2.05 to $2.20 with shares at $37.52. This was clearly a new position, as open interest in the strike was only 130 contracts before the trade appeared. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for $4.50 today, more than twice their purchase prices. The stock rose 7.28% at the same time, illustrating the kind of leverage that can be achieved quickly 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.

CRC popped 3.38% to $40.32 today. The Los Angeles-based oil and gas producer, a frequent target of call buyers, has rallied in the last two weeks as crude oil has climbed back above $70 per barrel.