$STNG call prices spike 9-fold

Bullish option traders targeted Scorpio Tankers several times in the last week, and today the name paid off big time.

On April 10, Investitute’s market scanners identified the purchase of 8,300 April $2 calls for $0.05 to $0.15 with shares at $2.07. Open interest in the strike was only 254 contracts before the trades occurred, showing that this was fresh buying.

Those calls traded up to $0.45 this afternoon, 9 times their initial purchase price. The stock rose 16.9% in the same time frame, underscoring how quickly 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.

STNG was up 2.15% to $2.38 today. The Monaco-based oil-tanker operator will report earnings on April 25 before the market opens.