Calls rack up quick gains in $EMES

It has taken just one week for option traders to quadruple their money in Emerge Energy Services.

On Jan. 3, Investitute’s proprietary programs cited the purchase of 1,650 March $10 calls for $0.27 to $0.35 with shares at $7.65. Volume was well above the strike’s open interest, indicating that this was fresh buying.

Today those calls traded for $1.25 just one week later, more than 4.5 times their original purchase price. The calls surged 30.7 percent at the same time, a large gain but nowhere near 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.

EMES jumped 8.17 percent to $9.80 today. The company has risen along with other fracking-sand producers as the energy sector has rallied in recent months with the price of oil