Bullish traders are turning more profits in Transocean.
On Sept. 14, Investitute’s market scanners identified the purchase of 9,000 October $10 calls for $0.25 with shares at $9.33. These were clearly new positions, as volume was well below the strike’s open interest of 1,762 contracts before the trades occurred.
Those calls sold for $0.72 today, nearly triple its purchase price. The stock rose 13.8 percent in the same time frame, showing how options can far outace gains in their underlying shares. It was the third winning call trade in Transocean posted on Investitute in the last month.
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.
RIG was up 1.94 percent to $10.51 today. The offshore driller, which has been resuming operations in the wake of Hurricane Harvey, eluded further devastation when Hurricane Hank was downgraded to a tropical storm over the weekend.