$OXY option bulls triple money

Option traders have found a barrel of gains on short-term positions opened in Occidental Petroleum (OXY) this week.

On Oct. 3, Market Rebellion’s Unusual Option Activity Service found that 4,900 Weekly $65 calls, expiring this Friday, were bought for $1.15 to $1.62 above open interest of just 3,810 contracts with shares at $63.83.

Those calls traded for as much as $5.75 so far today, at least 3.5 times their purchase prices. The stock rose 10.67% 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 was last up 4.09% at $70.51 this afternoon.