Traders drill for profits in Atwood

Investors have almost doubled their money in bullish positions on energy producer Atwood Oceanics.

On May 3, Investitute’s market scanners identified the purchase of 2,100 June $7 calls for $0.95 to $1.05, the shares at $7.53. Volume was well above the strike’s open interest of 130 contracts, showing that this was fresh buying.

Those calls were marked at $1.85 today, nearly double their purchase price. The stock rose less than 16 percent in the same time frame, illustrating the kind of leverage that can be obtained through options.

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.

ATW was up 0.29 percent to $8.73 today. The offshore energy driller beat earnings and revenue expectations on May 8.