Bulls double their money in $SQ

Square has rebounded sharply in recent weeks, yielding substantial profits on upside option positions.

On Nov. 23, Investitute’s tracking systems detected the purchase of 4,700 March $90 calls in one print for $1.64 with shares at $63.15. This was clearly a new position, as volume was above the strike’s previous open interest of 3,968 contracts.

Those calls traded for as much as $3 this morning, nearly twice their purchase price. The stock rose 14.74% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options. Investitute co-founder Jon Najarian updated the trade on CNBC’s “Halftime Report” today.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

SQ was up 3.02% to $71.95 today. The digital-payment service has rallied sharply from multi-month lows at the $55 level in recent weeks.