Bulls double money in $NLSN

Option traders collected significant profits in Nielsen amid takeover speculation today.

On Aug. 13, Investitute’s proprietary programs flagged the purchase of 10,100 January $30 calls for $0.60 as part of a bullish roll with shares at $26.26. This was clearly a new position, as open interest in the strike was only 247 contracts before the trade occurred. Later that month on CNBC’s “Halftime Report,” Investitute co-founder Jon Najarian also cited heavy buying in the February $30 calls, which have seen substantial gains as well.

The January calls sold for $1.25 today, more than twice their purchase price. The stock rose 5.9% 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.

NLSN was up 2.79% to $27.96 today. Bloomberg reported last night that Blackstone and the Carlyle Group have expressed interest in the media-ratings service.