$ANF bulls ring register again

Option traders doubled their money on upside positions in Abercrombie & Fitch (ANF) today.

On Oct. 18, Market Rebellion’s activity scanners found that 2,500 Weekly $16.50 calls expiring on Nov. 1 were bought for $0.36 to $0.38 with shares at $15.87. This was clearly fresh buying, as open interest in the strike was only 184 contracts before that session began.

Those calls traded for as much as $0.81 today, more than twice their purchase prices. The stock rose 8.07% in the same time period, illustrating how options can far outperform their underlying shares.

It is the second winning trade in the name posted on Market Rebellion in as many weeks.

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.

ANF is up 0.75% to $17.47 this morning. Quarterly results for the retailer are estimated for Nov. 28.