$BTU option bulls quadruple money

Option traders are seeing fast profits on upside positions in Peabody Energy Corporation (BTU) today.

On Feb. 28, Market Rebellion’s Unusual Activity programs found the the purchase of 9,500 March $18 calls as part of a bullish spread for $0.97 to $1.10 with shares at $16.82.

Those calls traded for as much as $4.10 this session, about 4 times their purchase prices. The stock rose 27.11% in the same time frame, illustrating the kind of leverage that can be achieved quickly 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.

BTU was last up 8.37% at $20.38 this morning.