Option bulls strike a gusher in $DVN

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

Back on Jun. 21, Market Rebellion’s Unusual Activity Service found that 11,700 January $28 calls were bought as part of a bullish spread for $4.05 to $4.25 above the existing open interest of 279 contracts with shares at $28.43.

Those calls sold for as much as $20.30 today, more than 4.5 times their purchase price. The stock rose 69.89% 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 $48.53, up 4.12% on the session.