$WPX bulls triple their money

Option traders ran up big profits in WPX Energy today ahead of quarterly results next week.

On April 3, Invesitute’s market scanners identified the purchase of 3,000 May $13 calls for $0.70 as part of a bullish spread with shares at $12.70. This was clearly a new position, as open interest in the strike was only 831 contracts before that session began.

Those calls traded for as much as $2.20 today, more than 3 times their purchase price. The stock rose 18.03% at the same time, underscoring how 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.

WPX was up 3.32% to $15.23 today. The oil and natural-gas producer is scheduled to report earnings after the market closes on May 1.