Trader quadrupled their money today in bullish earnings bets on Whiting Petroleum.
On Monday, Investitute’s tracking systems showed that 2,100 Weekly $5 calls expiring on Nov. 3 were purchased for $0.20 to $0.22 with shares at $4.85. This was clearly fresh buying, as open interest in the strike was only 146 contracts before the activity appeared.
Those calls traded up to $0.88, more than 4 times their original purchase price. The stock 21.2 percent in the same time frame, underscoring how options can far outperform their underlying shares in a short period of time.
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.
WLL jumped 4.68 percent to $5.82 today. That followed a spike of more than 14 percent yesterday after the oil and natural-gas producer reported a smaller quarterly loss than expected.