$ANF call prices quadruple

Bullish traders are ringing the register with big profits on Abercrombie & Fitch (ANF) options that expire this afternoon.

On Oct. 9, our activity scanners identified the purchase of 2,600 October $15 calls for $0.20 to $0.30 above open interest of 222 contracts with shares at $14.24. Market Rebellion co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $0.95 today, about 4 times their average purchase price. The stock rose 12.08% in the same time frame, underscoring how quickly 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.

ANF is off 1.12% to $15.95 in afternoon trading. Quarterly results for the retailer are estimated for Nov. 29 before the market opens.