Gusher keeps flowing for $MRO

Bullish option traders have quadruple their money in Marathon Oil.

On April 5, Investitute’s tracking systems detected the purchase of 7,700 April $17.50 calls for $0.24 to $0.33 with shares at $16.74. These were clearly new positions, as volume was well above the strike’s open interest of 2,542 contracts.

Those calls traded up to $1.08 this afternoon, 4.5 times their original purchase price. The stock rose 10.3% in the same time frame, underscoring how options can far outperform their underlying shares. It was the second winning Marathon trade posted on Investitute in as many weeks.

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.

MRO was up 3.01% today to close at $18.16. The oil and gas producer has rallied along with other energy names as the price of crude has surged to three-year highs.