$AXTA bulls double their money

Bullish option traders have racked up quick gains in Axalta Coating (AXTA).

On Oct. 1, our Unusual Activity scanners identified the purchase of 5,300 October $24 calls for $0.35 to $0.50 with shares at $23.03. This was clearly a new position, as open interest in the strike was only 4,728 contracts before that session began.

Market Rebellion co-founder Jon Najarian noted the activity that day during his live 3@3 show, which airs daily at 3:00 PM ET.

Those calls have traded for as much as $1.10 today, at least 2 times their purchase prices. The stock rallied 7.34% in the same time period, a large move but nowhere near that of its options 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.

AXTA was last at $24.68, up 2.83% for the session. The specialty coatings company has neared the top of its trading range for the period starting in June of this year.