Bulls double money in $CFX

Option traders have turned quick profits in Colfax.

On March 13, Investitute’s tracking systems detected the purchase of 5,000 18April $30 calls for $0.45 as part of a bullish roll with shares at $28.32. Volume was a mere 5 contracts before the trade occurred, showing that this was a new position. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $0.95 today, more than twice their purchase price. The stock rose 6.5% 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.

CFX reached a session high of $30.29 before pulling back to close at $30.09, down 0.2% on the day but still just off its highest level since last October. The industrial-engineering company issued guidance that exceeded analysts’ estimates in mid-March.