$NE call buyers post big profits

Bullish option traders have doubled their money in Noble.

On May 8, Investitute’s tracking systems detected the purchase of 3,000 January $6 calls in one print for $0.53 with shares at $4.79. This was clearly a new position, as volume was well above the strike’s open interest of 2,011 contracts.

Those calls sold for $1.16 today, more than twice their purchase price. The stock rose 29.6% in the same time period, showing how options can far outperform 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.

NE surged 7.16% to $6.14 today. The offshore energy driller has rallied along with other energy producers as the price of crude oil has spiked higher.