$BAC calls double overnight

Option traders are logging large profits today on bullish positions opened in Bank of America (BAC) only one session earlier.

Just yesterday, Investitute’s market scanners found that 5,000 Weekly $30.50 calls expiring on Aug. 30 were bought for $0.32 and $0.33 with shares at $29.53. This was clearly fresh buying as open interest in the strike was 745 contracts before the activity appeared.

Those calls have traded for as much as $0.63 so far today, about twice their purchase prices. The stock rose 2.3% at the same time, illustrating the kind of leverage that can be achieved with options.

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.

BAC is up 2.16% to $30.21 in midday trading. The bank’s earnings beat estimates on July 17.