$MUR calls double overnight

Option traders are collecting big profits today on bullish positions opened in Murphy Oil (MUR) only one session earlier.

Just yesterday, Market Rebellion’s activity scanners identified the purchase of 5,000 December $25 calls for $0.70 as part of a bullish roll with shares at $23.02. This was clearly a new position, as open interest in the strike was only 235 contracts before the trade occurred.

Those calls changed hands for as much as $1.45 today, more than twice their purchase price. The stock rose 8.12% 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.

MUR is up 3.86% to $24.73 this morning. The oil and gas producer beat earnings and revenue estimates on Oct. 31.