$OXY traders win being nimble

Occidental Petroleum (OXY) bulls made some fast money today over the course of one night.

Just yesterday, Investitute’s tracking systems detected the purchase of 2,800 Weekly $50 calls, expiring tomorrow June 14, for $0.11 with shares at $48.68. This was clearly fresh buying, as open interest was just 625 contracts before that session began.

Those calls traded up to $0.30 this morning, nearly 3 times their purchase price. The stock rose 2.16% in the same time period, a large overnight move but still nowhere near that of its options on a relative basis.

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.

OXY closed at $49.73 today, up by 2.01% on the session. The oil and natural-gas producer rose alongside the price of crude, which rallied amid tensions in the Middle East today.