$MPC call buyers top off with profits

Bullish option traders are topping off with profits in Marathon Petroleum (MPC) calls.

On Oct. 28, Market Rebellion’s activity scanners flagged the purchase of 15,000 January $30 calls for $1.79 to $1.91. The trade was part of a bullish spread with shares at $27.14.

Those calls sold for as much as $10.79 today, more than 5 times their purchase prices. The stock rose 50.07% 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 8.44% to $40.73 this afternoon. Shares rose to a new three-month high today alongside strength in the oil market.