$BCS bulls turn quick gains

It took just two sessions for option traders to double their money on upside positions in Barclays (BCS).

On Oct. 15, Market Rebellion’s proprietary programs flagged the purchase of 4,000 October $8 calls for $0.20 to $0.33 with shares at $8.21. This was clearly fresh buying, as open interest in the strike was 1,725 contracts before the activity appeared.

Those calls traded for as much as $0.55 this morning, more than twice their average purchase price. The stock rose 3.41% in the same time frame, 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.

BCS reached a session high of $8.51 this morning before pulling back to $8.37 this afternoon, still up 0.24% on the day. The London-based company rose along with U.S. banks and with optimism in Brexit negotiations. Barclays is scheduled to report earnings on Oct. 25 before the market opens.