Option bulls find profits in $COP

Traders are reaping huge gains today on bullish positions opened just over a month ago in ConocoPhillips (COP).

Back on Dec. 22, Market Rebellion’s Unusual Activity Service found that 2,000 January $74 calls were bought for $1.16 to $1.34 above the existing open interest of 32 contracts with shares at $70.41.

Those calls closed marked for $9.95 today, over 7 times their purchase prices. The stock rallied 19.87% in the same time period, a large move but nowhere near that of its options on a relative basis.

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.

COP ended the session up 0.97% at $84.40.