Traders are seeing exponential gains in CVR Refining.
On Aug. 30, Investitute’s tracking systems detected the purchase of 10,100 October $10 calls for $0.15 with shares at $8.30. There was no open interest in the strike before that session began, showing that this was new positioning.
Those calls ended trading today for $1.15, more than 7.5 times their purchase price. The stock rallied 33.7 percent in the same time period, a large move but one that is still far below that of its options.
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.
CVRR surged 7.35 percent to $10.95 today. The oil refiner was upgraded to “Buy” from “Hold” at Tudor Pickering this morning.