$SLB bulls double money

Option traders have turned quick profits on upside positions opened in Schlumberger (SLB) less than a week ago.

On Oct. 8, Market Rebellion’s tracking systems detected the purchase of 7,500 October $32 calls for $0.55 to $0.64 with shares at $31.19. Open interest in the strike was only 670 contracts before the trade occurred, showing that this was a new position.

Those calls have traded for as much a $1.20 so far today, twice their average purchase price. The stock rose 5.03% in the same time frame, illustrating the kind of leverage that can be achieved 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.

SLB is up 0.69% to $32.71 in midday trading. The oil-services giant is scheduled to report earnings before the market opens on Oct. 18.