$OAS calls turn quick profits

It took barely a week for bullish option traders to double their money in Oasis Petroleum (OAS).

On consecutive sessions at the end of last week, Market Rebellion’s activity scanners identified bullish activity in the same strike:

–On Sept. 11, 9,600 October $4 calls were purchased for $0.20 to $0.25 above open interest of 234 contracts with shares at $3.54.
–On Sept. 12, 6,000 October $4 calls were bought for $0.25 to $0.30 below open interest of 8,377 contracts but adding to previous volume with shares with shares at $3.49.

Those calls traded for as much as $0.45 today, more that twice their initial purchase price. The stock rose 13.28% in the same time frame, illustrating the kind of leverage that can be achieved 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.

OAS is up 2.79% to $4.05 in midday trading. The oil and gas company rallied as the price of crude spiked higher this week after last weekend’s attacks on a major Saudi Aramco production plant.