Bulls double money in $CVS

Option traders raked in large profits thanks to a strong earnings report by CVS Health today.

On April 3, Investitute’s proprietary programs flagged the purchase of 2,650 June $60 calls in one print for $0.68 with shares at $52.82. This was clearly a new position, as volume was well above the strike’s existing open interest of 1,057 contracts.

Those calls traded for as much as $1.39 today, twice their purchase price. The stock rose 9.3% in the same time period, 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.

CVS jumped 5.42% to $57.33 today. The health-services company topped quarterly estimates and raised its outlook this morning.