Bulls bank on $COF

Well-timed bullish option trades are turning fast profits in Capital One Financial (COF) today.

On Jun. 2, our Unusual Activity Service found that 4,000 July $80 calls were bought for $2.20 as part of a bullish roll above open interest of 1,513 contracts with shares at $71.55. Market Rebellion co-founder Jon Najarian cited the unusual activity at that time on his 3@3 program, which airs every day at 3:00 PM ET.

Those calls traded for as much as $9.25 this morning, more than 4 times their purchase price. The stock rose 18.73% in the same time frame, underscoring how quickly options can far outperform their underlying shares.

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.

COF was up 2.42% to $79.02 at the closing bell after reaching an intraday high of $85.22 earlier in the session. The banking and credit-card company rose along with U.S. bond yields after an improvement in the country’s employment situation.