$ALLY call buyers score again

Bullish option traders doubled their money Ally Financial (ALLY) today for the second time in the last week.

On July 11, Investitute’s tracking systems detected the purchase of 15,200 August $33 calls for $0.40 to $0.55 with shares at $31.59. This was clearly fresh buying, as open interest in the strike was a mere 9 contracts before that session began. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls sold for as much as $0.90 today, about twice their average purchase price. The stock rose 5.6% in the same time frame, showing how quickly options can far outperform their underlying shares.

It was the second winning trade in the name posted on Investitute since July 11.

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.

ALLY is up 5.6% to $33.21 this afternoon, just below a record high of $33.37 reached earlier in the session. The auto lender beat earnings and revenue estimates this morning.