$PAGP bulls double their money

Option traders are racking up sizable profits in Plains GP Holdings.

On March 13, Investitute’s proprietary systems found that 2,500 April $24 were purchased for $0.47 as part of a bullish roll with shares at $23.10. This was clearly a new position, as open interest in the strike was a mere 25 contracts before the activity appeared.

Those calls traded up to $0.91 today, twice their purchase price. The stock rose 6.3% in the same time period, underscoring how options can far outperform 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.

PAGP was up 1.87% to $25.11 today. The oil and gas infrastructure company has been trying to break out of its recent range as the energy sector has rebounded recently. Quarterly results are scheduled for May 8 after the market closes.