$CNC bulls double money

Option traders are logging large profits in Centene (CNC) today for the second session in a row.

On Oct. 30, Market Rebellion’s Unusual Option Activity Service identified the purchase of 11,300 December $55 calls for $2.15 to $2.60 with shares at $54.18. This represents fresh buying, as volume was well above the strike’s previous of 4,208 contracts.

Those calls have traded for as much as $5.65 today, more than twice their purchase prices. The stock rose 9.95% in the same time frame, 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 days.

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.

CNC opened at $59.74 right after the opening bell but has pulled back to trade at $59.18, off 0.3% on the session so far today. The health-care company has rallied sharply since announcing quarterly results on Oct. 22.