$HES bulls double their money

Option traders racked up big gains in Hess calls today.

On February 21, Investitute’s market scanners found that 4,400 May $47.50 calls were purchased for $2.49 to $2.67 with shares at $46.01. This was clearly a new position, as open interest in the strike was only 862 contracts before the activity appeared.

Those calls were marked at $4.75 today, nearly twice their original purchase price. The stock rose 9.6% in the same time period, illustrating the kind of leverage that options can provide over their underlying shares.

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.

HES was up 2.86% to $50.45 today. The oil and gas major has been holding its ground against a volatile market backdrop.