Patience pays for $COP bulls

Traders are reaping huge gains today on bullish positions opened just under two months ago in ConocoPhillips (COP).

On Jan. 15, Market Rebellion’s Unusual Activity Service found that 3,000 March $46 calls were bought for $2.72 with shares at $44.86. This was clearly fresh buying, as there was no open interest in the strike before the activity appeared.

Those calls were last marked at $11.85 today, over 4 times their purchase prices. The stock rallied 28.89% in the same time period, a large move but 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.

COP was last up 4.01% today at $57.82. The oil and gas producer has risen along with the price of crude.