$HAL bulls make a barrel of profits

Bullish option traders are turning a barrel of profits on short-term positions in Halliburton (HAL) today.

On Jul. 20, Market Rebellion’s Unusual Option Activity Service identified the purchase of 11,000 Weekly $14.50 calls expiring this Friday, Aug. 7, for $0.27 to $0.37 with shares at $14.14. This represented fresh buying, as volume was well above the strike’s previous open interest of 177 contracts.

Those calls have traded for as much as $1.12 this morning, more than 3 times their purchase prices. The stock rallied 10.47% in the same time frame, showing how quickly options can far outperform their underlying shares.

It is the second winning trade in the name posted by Market Rebellion in the past month.

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.

HAL was lat at $15.49 up 2.51% on the day. The energy-services company, which beat earnings-per-share expectations for the most recent quarter, has seen shares continue to climb after the industry’s API report showed last night that crude supplies dropped nearly 8.6M barrels last week.