$CPRI bulls triple money

It took just 24 hours for option traders to turn big gains on upside positions in Capri (CPRI).

Just yesterday, Nov. 25, Market Rebellion’s Unusual Option Activity Service identified the purchase of 3,900 Weekly $36.50 calls expiring this Friday for $0.30 to $0.50 with shares at $36.07. This represented fresh buying, as open interest in the strike before that session was a mere 34 contracts. Market Rebellion co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $1.45 this morning, more than 3 times their average purchase price. The stock rose 3.91% in the same time frame, illustrating how options can far outperform moves in their underlying shares on a relative basis.

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.

CPRI reached a session high early of $37.61 but has since pulled back, currently down 2.37% to $36.72. The London-based apparel retailer, whose brands include Michael Kors, Jimmy Choo, and Versace, reported its second quarter earnings results on Nov. 6.