$AAL bulls triple their money

Upside option trades in American Airlines are taking off.

On Oct. 11, Investitute’s tracking systems detected the purchase of 10,000 February $36 calls for $1.71 as part of a bullish roll with shares at $32.13. Open interest in the strike was only 437 contracts before the trade occurred, showing that it was a new position.

Those calls traded for as much as $4.80 this morning, nearly 3 times their purchase price. The stock rose 20.23% in the same time frame, a large move but nowhere near that of its options.

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.

AAL was up 0.5% to $38.29 today. The airline has been rallying along with other carriers as the price of oil has fallen.