$HES call prices triple overnight

Bullish option traders posted quick gains in Hess today.

Last Friday, Investitute’s tracking systems found that 2,500 Weekly $62 calls expiring on May 11 were purchase for $0.25 to $0.28 with shares at $58.86. These were clearly new positions, as open interest in the strike was only 60 contracts before the trades occurred.

Those calls sold for $0.75 today, 3 times their initial purchase price. The stock rose 4.2% at the same time, showing how quickly options can far outpace gains in 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.

HES was up 0.87% to $59.22 today. The oil and natural-gas producer topped first-quarter expectations on the top and bottom lines late last month.