$KMI bulls triple their money in hours

Traders who opened upside positions in Kinder Morgan this morning were pocketing big profits by the afternoon.

Barely an hour into today’s session, Investitute’s tracking systems showed that 5,000 Weekly $19 calls that expire this Friday were purchased for $0.07 to $0.09 with shares at $18.97. These were clearly new positions, as volume was well above the strike’s open interest of 2,809 contracts.

Those calls traded for $0.23 less than three hours later, tripling in value. The stock was up just 1.2 percent at the same time, underscoring how quickly options can outperform their underlying shares.

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.

KMI ended the session up 0.26 percent to $19.07. The Houston-based pipeline operator pulled back Monday after Hurricane Harvey forced it to close some facilities, the stock has since rebounded.