Option bulls pump $DVN profits

Patient bullish option traders have doubled their money on upside positions in Devon Energy (DVN).

Back on May 6, Market Rebellion’s Unusual Activity Service found that 12,000 October $30 calls were bought as part of a bullish spread for $1.30 above the existing open interest of 481 contracts with shares at $24.81.

Those calls sold for as much as $3.35 today, more than 2.5 times their purchase price. The stock rose 31.92% in the same time period, 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.

DVN was last at $32.69, up 7.36% on the session, setting a new 52-Week high.