Call triple on $TPR bounce

It has taken less than a week for bullish option traders to post big gains in Tapestry (TPR).

On Sept. 5, Market Rebellion’s tracking systems detected the purchase of 14,800 October $25 calls for $0.29 to $0.50 above open interest of 96 contracts with shares at $22.39. 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 $1.38 today, 3.5 times their average purchase price. The stock rose 12.68% in the same time frame, underscoring how quickly options can far outpace gains in 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.

TPR is up 3.79% to $25.21 in late-day trading. The retailer, formerly Coach, plunged after missing quarterly estimates in mid-August but have climbed steadily since naming a new CEO last week.