$ORCL call prices triple in hours

Option traders who opened bullish positions in Oracle this morning were reaping large gains by the afternoon.

About 30 minutes after the opening bell, Investitute’s tracking systems found that 5,000 Weekly $53 calls expiring on March 29 were purchased in one print for $0.31 with shares at $51.98. This was clearly a new position, as open interest in the strike was 1,844 contracts before the trade occurred. Investitute co-founder Pete Najarian cited the unusual activity in choosing ORCL for his final trade on CNBC’s “Halftime Report” today.

Those calls sold for as much as $0.87 by early afternoon, nearly 3 times their purchase price. The stock rose 2.64% 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.

ORCL ended the day down 0.21% to $52.94 but only after climbing steadily from its session low of $51 reached early in the morning. The database giant fell in after-hours trading last night despite topping quarterly estimates and issuing guidance above expectations.