$WFT traders turn big gains overnight

It took just 24 hours for option traders to triple their money in Weatherford.

Just yesterday, Investitute’s proprietary programs found that 4,100 Weekly $4.50 calls that expire on Oct. 6 were purchased for $0.09 to $0.13 with shares at $4.41. These were clearly new positions, as volume was well above the strike’s open interest of 479 contracts.

Long calls lock in the price where a 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.

Today those calls traded up to $0.27, triple their original price. The stock rose 6.8 percent at the same time, showing how quickly options can far outpace gains in their underlying shares.

WFT ended today’s session up 0.22 percent to $4.51. The oilfield-services company has rebounded this month along with other energy names as the price of crude has risen.