Call buyers turn quick profits in $LYB

Option traders have already doubled their money on bullish positions opened in LyondellBasell toward the end of last week.

Last Thursday, Investitute’s proprietary programs found that 2,100 Weekly $102 calls expiring this Friday were purchased for $1.15 to $1.52 with shares at $101.49. Open interest in the strike was a mere 40 contracts before the trades occurred, showing that this was fresh buying.

Those calls traded for $2.50 today, more than doubling their original purchase price just two sessions later. The stock was up just 2.6 percent at the same time, illustrating the kind of leverage that can be achieved through 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.

LYB jumped 7.06 percent today to close at $106 even. The stock spiked higher this afternoon when the Wall Street Journal reported that LyondellBasell has made a bid to acquire Brazilian chemical manufacturer Braskem.