NEW YORK -- Chemicals maker LyondellBasell ( LYB) rebounded from a long-term low Tuesday, and the bulls turned some quick profits.
OptionMonster's Heat Seeker tracking system detected heavy buying in the December 72.50 calls, most of which priced for $1.20. More than 4,500 contracts changed hands early in the session, well above the strike's previous open interest of 1,686 contracts.
The stock started climbing immediately and at one point was up more than 4%. The options, meanwhile, doubled to $2.40.
That kind of leverage often occurs with calls because they only lock in the price where a stock can be purchased. Their cheap cost helps manage risk, but can also result in giant gains on a%age basis if shares move in the right direction.
LyondellBasell ended the session at $71.55, up 1.25%. It's trying to climb from its lowest level since September 2013.
Overall option volume in the name was almost quadruple average amounts, with total calls outnumbering puts by more than 7 to 1. Turnover in the December 72.50 calls more than doubled from our initial post, surpassing 9,300 contracts.
-- Written by David Russell of OptionMonster
Russell has no positions in LYB.