$MPC call buyers fill up with profits

Bullish option traders are filling up with profits in Marathon Petroleum (MPC) calls.

On Jul. 15, Market Rebellion’s Unusual Activity Service found that 5,000 October $57.50 calls, expiring tomorrow, were bought for $2.40 above the existing open interest of 1,438 contracts with shares at $54.58.

Those calls sold for as much as $9.10 today, more than 3.5 times their purchase price. The stock rose 22.02% in the same time period, a large move but nowhere near that of its options on a relative basis.

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.

MPC ended up 2.22% to $66.68 this afternoon, a new 52-Week high.