$MOS bulls turn quick gains

It has taken just one session for option traders to triple their money in Mosaic (MOS).

On June 14, Investitute’s tracking systems detected the purchase of 2,400 June $23 calls for $0.20 to $0.30 with shares at $22.71. This was clearly fresh buyuing as volume was well above the strike’s previous open interest of 1,869 contracts.

Those calls have sold for as much as $0.70 today, about 3 times their average purchase price. The stock rose 3.39% in the same time frame, 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.

MOS is up 4.38% to $23.34 in afternoon trading today. BofA Merrill Lynch upgraded the fertilizer company “buy” from “neutral” with a price target of $30.