Bulls double money in $HOG

Option traders are cashing in on Harley-Davidson for the second time in less than a week.

On March 27, Investitute’s proprietary programs found that 1,750 Weekly $36.50 calls expiring on April 12 were bought for $0.41 with shares at $35.11 This was clearly a new position, as open interest in the strike was a mere 6 contracts before the trade occurred.

Those calls sold for $0.89 the last half-hour of today’s session, more than twice their purchase price. The stock rose about 5% in the same time frame, illustrating the kind of leverage that can be achieved with options.

It is the second winning trade in the name posted on Investitute in four sessions.

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.

HOG was up 3.65% to $36.96 today. The iconic motorcycle manufacturer has rebounded from a key support level.