$NBR bulls score quick gains

It took less than 24 hours for option traders to rack up profits on upside positions in Nabors Industries

Yesterday afternoon, Investitue’s proprietary programs flagged the purchase of 3,000 November $4.50 calls in one print for $0.03 with shares at $4.12. Open interest in the strike was a mere 37 contracts before the trade occurred, showing that it was a new position.

Those calls traded up to $0.22 this morning, 7 times their purchase price. The stock rose 12.62% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

NBR jumped 3.37% today to close at $4.60. The oilfield-services company climbed as the price of crude rebounded after dropping sharply for the last several weeks.