$MRO calls quadruple overnight

Option traders turned huge profits today on upside positions in Marathon Oil opened 24 hours ago.

Just yesterday, Investitute’s tracking systems found that 4,300 Weekly $15 calls expiring this Friday were purchased for $0.26 to $0.32 with shares at $15.03. These were clearly new positions, as open interest in the strike was only 669 contracts before the trades occurred.

Those calls sold for $1.02 at the end of today’s session, 4 times their original purchase price. The stock rose 6.6 percent at the same time, showing how quickly options can far outpace gains in 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.

MRO was up 3.82 percent today to close at $16.02. The oil and natural-gas producer has received several analyst upgrades in recent weeks, including this morning when Seaport Global raised the name two notches to “buy” from “sell.”

(Disclosure: I am long MRO.)