Bulls double money in $CSX

It has taken barely a week for option traders to cash in big gains on CSX (CSX).

On Oct. 29, Market Rebellion’s activity scanners found that 4,000 Weekly $72 calls expiring on Nov. 22 were bought in one print for $0.92 to $0.98 as part of a bullish spread with shares at $70.82. This was clearly a new position, as open interest in the strike was a mere 35 contracts before the trade occurred.

Those calls sold for as much as $2.01 today, more than twice their purchase prices. The stock rose 3.4% 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.

CSX opened at $73.80 this morning but has pulled back to $72.99 this morning, off 1.2% on the session. The railroad operator has rallied in recent days with hopes of progress on U.S.-China trade negotiations.