Traders double their money in $RIG

Transocean has been climbing with the the slow recovery from Hurricane Harvey, and bullish option positions are paying off.

On Aug. 16, Investitute’s market scanners identified the purchase of 11,896 September $8 calls in one print for $0.37 with shares at $7.80. Open interest in the strike was 1,970 contracts before the trade occurred, showing that it was a new position.

Today those calls traded for $0.87, more than doubling in value. The stock rose 13.1 percent in the same time, illustrating the kind of leverage that can be achieved through options. It was the second winning call trade in Transocean posted on Investitute in just over a week.

Long calls lock in the price where the 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.

RIG was up 2.69 percent today to close at $8.79. The offshore driller has risen along with other energy names in recent days as refineries in the storm-battered Gulf of Mexico have slowly begun resuming operations.