Bulls double their money in $XLI

Option traders have turned quick profits in the SPDR Industrial Fund.

On Nov. 26, Investitute’s tracking systems found that 20,000 Weekly $72 calls expiring on Dec. 7 were purchased for $0.53 as part of a bullish spread with shares at $70.54. Volume was far above the strike’s open interest of 2,561 contracts before the trade occurred, showing that it was a new position. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for $1.10 this afternoon, more than twice their purchase price. The stock rose 2.3% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options.

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.

XLI was up 0.06% today to close at $71.84. The exchange-traded fund–whose top three holdings are Boeing (BA), 3M (MMM), and Union Pacific (UNP)–has rallied in recent days as investors have rotated into beaten-down cyclical names.