Bulls turn quick gains in $GPRE

Option traders have more than doubled their money on upside positions opened in Green Plains (GPRE) only minutes before its earnings report was released.

Just before the closing bell on Nov. 5, Market Rebellion’s proprietary programs flagged the purchase of 2,600 December $14 calls for $0.66 to $0.70 as part of a bullish roll with shares at $13.15. This was clearly fresh buying, volume was well above the strike’s existing open interest of 226 contracts.

Those calls have traded for as much as $1.50 so far today, more than twice their purchase price. The stock rose 13.46% in the same time frame, showing how quickly 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.

GPRE is up 0.92% to $14.79 in early trade today. The ethanol producer missed quarterly estimates after the market closed on Nov. 5 but rallied on comments from the company’s CEO about the future.