$OXY bulls double money quickly

Option traders have logged quick profits on short-term positions opened in Occidental Petroleum (OXY) last week.

On Nov. 13, Market Rebellion’s Unusual Activity Service showed that 2,000 Weekly $13 calls expiring this Friday, Nov. 27, were bought for $0.44 to $0.49  with shares at $12.78. This was clearly fresh buying, as open interest in the strike was only 896 contracts before that session began.

Those calls have traded for as much as $2.10 so far today, at least 4 times their purchase prices. The stock rose 18% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options.

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.

OXY is up 1.82% to $15.09 this afternoon. The oil and gas producer has risen along with the price of crude which was last near levels of August earlier this year.