$MT call prices rocket 23-fold

Cheap bets placed on bullish options in ArcelorMittal less than a week ago have already turned geometric gains.

On Sept. 14, Investitute’s tracking systems detected the purchase of 3,000 September $31 calls in one print for $0.06 with shares at $29.26. This was clearly a new position, as volume was well above the strike’s open interest of 2,024 contracts before that session began.

Those calls traded up to $1.40 today, more than 23 times their purchase price. The stock rose 11.77% at the same time, underscoring how options can far outperform their underlying shares. Investitute co-founder Pete Najarian cited even more buying in the October $33 calls on CNBC’s “Halftime Report” this afternoon.

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.

MT jumped 4.02% to $32.38 today. The steel maker had been beaten down amid trade concerns but broke a four-month downtrend this week.