$AA bulls double money in a day

Bullish option positions opened in Alcoa at the end of last week are already turning sizable profits.

Early on Aug. 10, Investitute’s tracking systems found that 15,500 Weekly $45 calls expiring on Aug. 24 were purchased for $0.52 to $0.60 with shares at $43.06. Open interest in the strike was a mere 95 contracts before the trades occurred, showing that this was fresh buying. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded up to $1.27 this morning, more than double their purchase prices. The stock rose 4.09% at the same time, illustrating the kind of leverage that can be achieved quickly with options. It was the second winning trade in Alcoa cited on Investitute in as many sessions.

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.

AA reached a high of $44.92 this morning before pulling back with the rest of the market to close at $44.45, off 1.18% on the session.