$AVP bulls post another win

Avon Products (AVP) bulls posted another win in upside option positions today for the fourth time in the last week.

On May 20, Investitute’s market scanners found that 12,000 Weekly $3.50 calls expiring on June 14 were bought for $0.10 and $0.15 as part of a bullish roll with shares at $3.14. There was no open interest in the strike before the trade occurred, showing that it was a new position.

Those calls traded for $0.30 today, more than twice their purchase prices. The stock rose 15.92% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options.

It is the fourth winning trade in the name posted on Investitute since May 17.

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.

AVP was up 2.78% to $3.70 today. Brazil’s Natura Cosmeticos announced on May 22 that it has reached a deal to acquire Avon in an all-stock transaction valued at about $2 billion.