$WPX bulls score

Option traders are logging big gains on upside positions in WPX Energy (WPX) today.

On Sep. 22, Market Rebellion’s Unusual Option Activity market scanners identified the purchase of 19,000 January $5 calls bought for $0.65 as part of a bullish spread with shares at $4.56. This was clearly fresh buying, as open interest in the strike was a mere 1,355 contracts before that session began.

Those calls traded for as much as $2.90 so far today, more than 4 times their purchase price. The stock rose 72.59% in the same time period, a strong 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.

WPX is up 3.76% to $7.72 in mid-afternoon trading. The oil and natural-gas producer rallied today with other energy names as the price of crude spiked higher.