Bulls double money in $SLB

Option traders are logging large profits on upside positions in Schlumberger (SLB) today, thanks to strong quarterly results.

On Dec. 3, Market Rebellion’s Unusual Activity Service flagged the purchase of 7,270 February $37.50 calls for $1.27 as part of a bullish spread with shares at $34.79. This was clearly a new position, as open interest in the strike was 4,764 contracts before that session began.

Those calls have traded for as much as $2.83 so far today, more than twice their purchase price. The stock rose 14.8% in the same time period, 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 1.34% to $39.30 this morning. The oil-services giant beat earnings and revenue estimates before the market opened today.